Proportion of financial and insurance assets in China

I. Overview of China's financial assets structure

China's financial assets are mainly divided into cash in circulation, deposits from financial institutions, loans from financial institutions and securities (bonds, stocks, etc.). ). Table 1 lists the distribution of major financial assets in China (see tables 1978, 1986, 199 1, 1995).

Since the reform and opening up, China's financial assets have developed from single bank assets to marketization and diversification. 198 1- 1995, a total of 479.439 billion yuan of government bonds, 365.438+0398 billion yuan of state investment bonds and investment company bonds, financial institution bonds 1 18297 billion yuan, and corporate bonds/. The appearance of these financial instruments laid a foundation for the further development of China's money market and capital market. However, most of China's financial assets are still deposits and loans from banks and financial institutions. The ratio of deposits and loans of banks and financial institutions to total financial assets is 93% in 1978, 87% in 1986, 84% in199/kloc-0 and 83% in 1995. Although the proportion has been declining since the reform and opening up, it has been slowly declining since the 1990s, which shows that the development of China's money market and capital market is not satisfactory. The proportion of total financial assets in China's gross national product rose from 94% in 1978 to 22 1% in 1995, reflecting the process of financial deepening (monetization) in the economic system reform. In the 1980s, this proportion rose rapidly, but in the 1990s, the rate of increase slowed down.

The main body of savings in China has also changed in the reform, from the former government and state-owned enterprises to the present people. According to the world bank experts' estimation, before the reform, China's government accumulation accounted for more than 70% of the total accumulation. 1978 domestic savings accounted for 35.5% of the gross national product, of which residents' savings accounted for 1.2%, government savings accounted for 15.4%, and enterprise savings accounted for 18.9%. In other words, 96.7% of the total social savings of 1978 come from the government and state-owned enterprises. At the end of 1978, the savings balance of Chinese residents was only 2 106 billion yuan, accounting for 5.9% of the gross national product and 16.2% of the total social deposits in that year.

Before the reform, the state was the main body of savings and investment, so there was no need for financial intermediaries. Investment in state-owned fixed assets mainly comes from financial allocation, and bank loans are mainly used as working capital. Bank loans also mainly come from the deposits of the government and state-owned enterprises and institutions. 1978, the sum of corporate deposits and financial deposits was10899.9 billion yuan, accounting for 83.8% of the total bank deposits.

At the end of 1995, the balance of deposits in financial institutions in China was 5.4 trillion yuan, of which residents' savings were nearly 3 trillion yuan. Depositors and investors are separated. The biggest savers are ordinary people, and the biggest investors are the state. The intermediary role of banks and financial institutions has become very important. Through the control of banks and financial institutions, the state invests in the construction of state-owned enterprises with the money of ordinary people. Therefore, the real owners of state-owned enterprises can be said to be ordinary people who deposit in national banks.

Macro-financial asset structure is inevitably reflected in the asset-liability structure of enterprises. Loans from banks and financial institutions are the main source of funds for enterprises in China. It is difficult for enterprises to obtain funds by issuing bonds, stocks and other direct financing methods. From 1986 to 1995, * * * issued corporate bonds1738.3 billion yuan. 1At the end of 1995, the stock market value (A shares) was about 450 billion, of which only 1/3 was listed and circulated. Most of the state-owned shares are converted from past investments and land values, and the actual cash investment is not much. The issuance of legal person shares and individual shares can enable enterprises to raise cash, but too few enterprises can be allowed to issue shares. In this way, the funds that enterprises can raise by issuing stocks are very limited, and most enterprises can only rely on bank loans.

In addition to the main financial assets, there are other financial assets, such as private lending, private fund-raising and joint-stock cooperative shares. These financial assets all have the ownership, participation and disposal rights in a certain sense, and get benefits from them. However, at present, private lending and private fund-raising need to be further standardized.

The structure of China's financial assets can be summarized as follows: the main body of savings has changed from the government to the people in the reform and opening up; The proportion of national government revenue in the gross national product has decreased year by year, from 3 1% in 1978 to10.8% in 1995; Since 1985, the state's investment in state-owned enterprises has changed from appropriation to loan, and the capital market channels for direct financing are narrow; Other real estate markets have just started. This makes people deposit most of their savings in banks, and banks lend most of their funds to state-owned enterprises, which has become the main source of long-term investment (fixed capital) and liquidity of state-owned enterprises, leading to the rising asset-liability ratio of state-owned enterprises.

2. Why is the proportion of broad money in China's gross national product growing rapidly?

There are two main lines in the changing process of financial assets in China, one is the monetization process, and the other is the development of money market and capital market. This paper mainly analyzes the monetization process. Monetization has two meanings: first, the monetization of fiscal deficit, that is, the state makes up the fiscal deficit by printing money. The second is monetization in the process of economic development, that is, in the process of economic development, especially in the process of reform and transformation, there is an extraordinary demand for money, which slows down the circulation of money. The monetization of this paper refers to the latter meaning.

From 1978 to 1995, the gross national product of China increased by 9.7% annually, the inflation rate was 7.5% on average, and the broad money (M2) increased by 25% annually. The growth rate of broad money in such a long period far exceeds the sum of GDP growth rate and inflation rate, which is rare in the economic development history of various countries. According to the author's conservative estimation, from 1978 to 1992, the central government's annual coinage income accounts for about 3% of the gross national product on average. Xie Ping (1994) estimated that in 1986- 1993, the central government obtained an average of 5.4% of the gross national product from currency issuance every year. Overseas economists often don't understand why the China government's actual comprehensive deficit is so high (about 8-9% of GNP), while the inflation rate is not very high. One of the important reasons is the coinage income brought by monetization.

Table 2 gives the main indicators of the monetization process in China. During the reform period, the ratio of broad money (M2) to gross national product (GNP) in China showed a rapid upward trend. From 32% of 1978 to 105% of 1995, which is rare in the case of financial deepening in developing countries. During the period of 1994- 1995, the proportion of broad money in GNP was 59% in the United States, 104% in Britain,14% in Japan, 70% in Germany, 46% in Indonesia and 44% in South Korea. China's ratio far exceeds that of neighboring developing countries, and even compared with developed countries such as Britain, America, Japan and Germany, it is quite high, second only to Japan.

The rapid growth of the ratio of broad money to gross national product in China is the necessity of financial deepening in the reform, and it also reflects the problem of financial asset structure in China. In the reform and opening up, the main body of savings in China has changed from the state to the common people, and the income distribution has tilted towards the residents. However, ordinary people do not have many choices to invest in financial assets, and bank savings have always been the main channel. This is mainly caused by the lagging development of China's capital market. The high proportion of broad money in China's gross national product is not the natural choice of economic subjects, but the necessity under the constraints of existing systems and policies. The ratio of money to broad money (M 1/M2) in Table 2 proves this point from another aspect. The proportion of money in broad money decreased from 82% in 1978 to 39% in 1995. In other words, not only the broad money grows rapidly, but also the structure has changed greatly. Residents' savings account for an increasing proportion of broad money, reflecting that most of the financial assets held by residents are bank deposits. From 65438 to 0995, the net cash input was 60 billion yuan, and the cash in circulation in the whole society only increased by 8.3% over the previous year; M 1 growth16.8%; M2 increased by 29.5%, 4.5 percentage points higher than the control target of 25%.

The lag in the development of China's capital market can also be seen from the comparison of financial asset structures in various countries. Table 3 gives a comparison of China's financial asset structure with neighboring countries and some developed countries. 1993 China's stock market value accounts for 9% of GDP, and the bond market value accounts for 1 1% of GDP. The average market value of stocks in neighboring countries accounts for 148% of GDP, and the average market value of bonds accounts for 30% of GDP. In the four developed countries, the average market value of stocks accounts for 75% of GDP, and the market value of bonds accounts for 74% of GDP. The development of China's capital market not only lags behind developed countries, but also lags far behind neighboring developing countries.

Third, the consequences of China's abnormal financial asset structure.

1. The corporate debt ratio is high. According to the figures of State-owned Assets Supervision and Administration Bureau, the asset-liability ratio of state-owned industrial enterprises was only 18.7% in/980. From 1990 to 1993, they are 58.4%, 60.5%, 6 1.5% and 7 1.7% respectively. 1994, when verifying the assets of124,000 state-owned enterprises, the asset-liability ratio of state-owned enterprises has risen to 75. 1%, and if the actual losses of suspense accounts are deducted, the asset-liability ratio of state-owned enterprises reaches 83.3% (Wu Xiaoling, 1995).

2. The risk of financial operation is high. First, the turnover rate of bank credit funds slowed down. The annual turnover rate of bank loans in China dropped from 1.32 in 1993 to 1. 15 in 1995, that is, only once every 3 13 days. Second, state-owned enterprises are seriously in arrears with each other. 195 The interest receivable from banks nationwide reached more than 220 billion yuan, an increase of nearly 654.38 billion yuan over the previous year. Third, the quality of credit assets of state-owned banks has gradually declined. At the end of 1995, non-performing loans accounted for 22.3% of all loans. If the loan balance of CDB 1995 is 4 trillion, then there are about 900 billion non-performing loans. Fourth, state-owned banks have difficulties in operating. The profits paid by China, agriculture, industry and construction192 were 34.3 billion yuan, which fell to16.6 billion yuan in194. 1995 losses of the whole industry except China Bank in the first half of the year.

3. The debt burden of state-owned enterprises is heavy. 1996 in the first quarter, the national state-owned industrial enterprises suffered a net loss while the overall economy developed steadily, with a total loss of 34 1 100 million yuan. The proportion of loss-making enterprises rose from 40.8% in the same period of 1995 to 44.9%, and among large and medium-sized state-owned enterprises, the proportion rose from 45. 1% to 5 1.4% (Shi Gang, 1996). 1996 the situation improved slightly in the second and third quarters, but the overall economic benefit is still not optimistic. One of the important reasons for the loss of state-owned enterprises is the heavy debt burden, and many state-owned enterprises are short of funds. Especially after the 1985 loan reform, some state-owned enterprises rely entirely on bank loans for their fixed assets investment and liquidity. The hard-earned money of state-owned enterprises was returned to the banks.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.