Talk with officials about modern finance

Author: Wang Dongjing
Publisher:
Publishing Date: 2003-01-01
Features: One of the defining characteristics of modern economy is its financialization. Comrade Deng Xiaoping once said, "Finance is very important; it is the core of the modern economy. If finance is well-managed, one move can activate the entire game." These words are indeed insightful, capturing the essence of global trends. Accompanying economic financialization is the globalization of finance. Traditional finance has three major sectors: indirect financing primarily based on bank credit, direct financing mainly through securities financing, and the closely related insurance industry. These three sectors advance in tandem, forming a tripod and constituting the magnificent structure of the financial edifice. As economies and societies transition from closure to openness, global financial rivers converge and unite as one. Scientist Lorenz of the United States once said that a small butterfly flapping its wings in the Brazilian rainforest could, in a few weeks, trigger a tornado in Texas. Global finance is no exception—it brings countless benefits to humanity but also sparks numerous financial storms and constant international financial "hotspots," drawing ever-increasing attention. Mature financial markets, a comprehensive financial system, and sound regulatory mechanisms are important indicators of a high-level economy. China's financial reform is making steady strides toward this goal. Over the past two decades, we have reformed the traditional planned financial model and have established a comprehensive financial system with complementary functions. Capital markets, money markets, and insurance markets have emerged from nothingness and are gradually maturing. Macro-financial regulation has shifted from direct control to indirect control. The renminbi has achieved free convertibility in the current account, and interest rate liberalization is proceeding actively and steadily. As a developing major country, we strictly adhere to our commitments to WTO members and are further opening up our domestic financial markets in accordance with WTO regulations. It is said that after the publication of Dream of the Red Chamber, Qing Dynasty scholars became utterly captivated, with the saying, "To discuss anything without mentioning Dream of the Red Chamber is to read books in vain." Today, with financial development advancing by leaps and bounds, the enthusiasm of the Chinese people for learning about finance far surpasses the scholars' obsession with the novel. Financial issues are no longer the exclusive domain of scholars—even market manipulators and retail investors in the stock market, as well as ordinary citizens depositing money or buying treasury bonds, show strong interest in finance. As a special social group, government officials shoulder the important mission of "serving as an official in a place and bringing blessings to its people." Learning about finance carries even greater significance for them. It can be said that only by acquiring essential financial knowledge can leaders discern the complexities of financial phenomena with sharp vision, seeing through their essence; when handling financial issues, they can navigate them with ease, like a butcher carving an ox. Otherwise, they may fail to understand the situation and lack a clear approach. Relying on impulsivity or subjective judgment will inevitably lead to mistakes and economic losses. There is an old Western saying: "All roads lead to Rome." Serious and standardized writing is essential for academic papers. However, for a broad readership, a good finance book does not necessarily have to adopt an academic writing style. Over the years, I have strived for a certain: "True Buddhas speak in everyday language." When writing and publishing, I aim for simple and clear language. The book now before you is written specifically for government officials. If you find it enjoyable and can draw broader insights and understandings, then the author's purpose will have been fulfilled.