Shenwan Hongyuan Yang growth: change the development of ideas to focus on improving the transformation of scientific and technological innovation achievements

Financial Sector Website After a hundred years of industrial changes, exerting the power of scientific and technological innovation and capital, and exploring the future industrial layout and development of listed companies in the midst of the opportunities and challenges.2020, November 20, 2020, guided by the Shanghai Hongqiao Business District and the People's Government of Minhang District, and hosted by Siya Asset Management, with the support of the associations of 20 listed companies in Shanghai, Guangdong, Hunan, Fujian, Shaanxi, On November 20, 2020, "Discussing the Great Hongqiao, Focusing on the Hub - Leading the Economic Growth Pole - 2020 Hundred Listed Companies Closed Door Meeting" will be held in Shanghai, which is directed by Shanghai Hongqiao Business District, Minhang District People's Government, organized by Siya Asset Management, and co-sponsored by 20 listed companies' associations in Shanghai, Guangdong, Hunan, Fujian, Shaanxi, Anhui, Henan, Shanxi, and Guangxi, with the strategic cooperation of China Merchants Bank, and the special support from Ernst & Young, King & Wood Mallesons, and the Institute of Chief Economists.

Min Shilin, Secretary of the Party Group and Executive Deputy Director of Shanghai Hongqiao Business District Management Committee, Jin Guojun, Deputy Director, Wu Bin, Standing Committee Member of Minhang District Committee and Deputy Mayor of Minhang District, Zhang Landing, CEO of Silicon Asia Investment, Yang Changcheng, Chief Economist of Shenwan Hongyuan Securities, Zhao Ju, Chief Investment Officer of China Merchants Bank Headquarter and CEO of China Merchants Bank International Finance Co. As well as the chairmen, general managers and executives of hundreds of listed companies*** gathered together to discuss the strategies for listed companies to leapfrog the cycle and realize high-quality growth in the new cycle.

Pictured: Mr. Yang Changcheng, Chief Economist of Shenwan Hongyuan Securities

Mr. Yang Changcheng, Chief Economist of Shenwan Hongyuan Securities, delivered a keynote speech titled "Finding Business Opportunities in the Double Cycle Development Pattern, Interpretation of the 14th Five-Year Plan Recommendations", and gave a speech on the focus of the current new environment: how to deal with the great changes that have not been seen in the last hundred years? How can enterprises respond to the new development pattern of double-cycle development? How can enterprises cope with the new development pattern of double-cycle? and so on. From the strategic environment with new changes in challenges and opportunities, the strategic goals connecting the vision and the current period, the strategic deployment of seven systematic initiatives, to the strategic center of gravity of the new development pattern of the double cycle of domestic and international development, it is a step-by-step process.

On how to implement the double cycle, he mentioned that "the supply-side cycle is actually to open up the relationship between science and technology, finance and industry, enterprises to increase investment in R & D, increase scientific and technological innovation, but also focus on the transformation of the ability to improve, so that scientific and technological research and development ultimately transformed into the core competitiveness of the enterprise, so as to develop into a scientific and technological innovation-oriented enterprises, in addition to enterprises to learn to apply financial tools to lock the financial instruments, so that they can be used for the development of the enterprise. In addition, enterprises should also learn to apply financial tools to lock in the risk of market fluctuations in the next few years." He also mentioned that "one has to learn to lead and create demand in order to develop into a great enterprise." That is to say, based on innovation, the formation of demand-driven supply, supply to create demand for a higher level of dynamic equilibrium, Chinese enterprises in the "14th Five-Year Plan" period can realize high-quality development.

The following is the full text of the speech:

I would like to focus on three issues. First, we still need to understand what the General Secretary's talk about the century's unprecedented changes mean for our enterprises. The second is that during the 14th Five-Year Plan period, the Chinese government or the Central Committee of the Communist Party of China (CPC) has proposed that the main countermeasures to deal with the great changes that have not been seen in the past hundred years should be taken. Third, we all know that we have put forward a new pattern of development - double cycle, double cycle, for enterprises to speak of what we have to pass, I mainly talk about these three things.

First of all, on the century has not been a big change in the end what is the meaning of the situation, of course, we will have different interpretations, I think there are three kinds of meaning for our business simply: First, it means that since the Second World War to the United States as the dominant establishment of this set of global structures, systems and rules, including the rules of trade and investment in our business investment is undergoing a positive change, regardless of whether you never engaged in trade, all business operations are dependent on the rules, dependent on the global exchange rate rules, dependent on the trade rules, dependent on the investment rules, we have to recognize that the rules are mainly led by the United States, to the West as the main body of the establishment of this set of global governance system, the rules of governance, but now is changing, we are talking about whether the dollar is able to continue to be or long term as a global currency as the The main purpose of our trade and investment, commodity pricing is mainly up and down pricing, we are now commodities up and down, we adhere to the multilateral trade rules, but the WTO rules do need to be changed, including the RCPC that we signed two days ago, the bilateral trade rules are constantly changing and evolving, so what does that mean? It means that the governance system, the governance structure and the rules that we rely on are changing, and what does that mean for business? This is the first layer of meaning.

The second meaning of the Secretary is that the relationship between the big powers is changing, but we do not know how the relationship between the big powers will be transformed, in the past, you may be able to tell what the relationship between the United States, China, Russia, Europe, India, Japan and these countries, today you are afraid that it is very difficult to tell, so we are in the process of rapid change in the relationship between the big powers, we need to do investment, do business, we need to do business. We do investment, do business also rely on the relationship between the big powers, so the relationship between the big powers is extremely important, which is especially prominent is the relationship between China and the United States, our relationship between China and the United States holds three views:

First of all, we do not replace the U.S., we very much hope that the U.S. to play a good role as a big country, and secondly, China and the U.S. can not go back to the relationship between the Cold War, can not be like the former Soviet Union and U.S. relations, so we are firmly oppose the ideologization and politicization of trade issues, financial issues, investment issues, and the basis of trade and investment cooperation around the world is one - the rules of market economy. Third, of course, we can not bide our time on global trade rules, we do not participate, China as a global economic power must actively participate in global governance, this is the second layer of meaning, that is to say, the global relationship between the major powers is now changing, but how to change, in what direction now there is still a great deal of uncertainty, of course, we have some directional principles.

For listed companies, the external development of enterprises has undergone a long-term trend of change, we know that our enterprises in the operation of this as a guiding principle, the external environment of your development has undergone a long-term change, although the challenges and opportunities of our enterprises are in, but this challenge and opportunity compared to the past have undergone new changes, this is I think we first need to cognize This is the first thing I think we need to recognize, our current cycle is not a product cycle, not an economic cycle, not a financial cycle, it is a century of unprecedented changes, we do not see these things happening at the moment as a coincidence, such as friction between the U.S. and China, the epidemic occurred at this stage, the event passed everything will be peaceful, this kind of thinking is not to be, the epidemic happened by chance, but the epidemic can be in two hundred in a few months. It is not accidental that an epidemic can spread simultaneously in more than 200 countries and economies in a few months. You can find an epidemic in history that infected all the countries and economies of the five continents in such a short period of time, and that's the kind of situation that can only occur in our current situation. That's the first one I want to tell you about.

Secondly, how to deal with the great changes that have not been seen in a century? I think the Fifth Plenary Session has actually put forward the overall guiding ideology for us to deal with the great changes that have not occurred in a century. This is what the General Secretary put forward, to double cycle for the development of a new pattern, why double cycle?

First of all, the external environment has a great deal of uncertainty, instability and unpredictability, many of our enterprises may rely on the international market, rely on the international energy and raw materials, what is the price this year, what is the price of the next year, in the past, you can predict, now it is difficult to predict, there is a great deal of uncertainty. So in this case, of course, we have to play to our strengths, relying on the domestic market, relying on their own potential, so we have to strengthen the internal cycle, at the same time, we are definitely not engaged in a closed economy, we open up even more vigorously, to realize the positive interaction between internal and external cycle, which is the strategic guiding principle of the double cycle proposed by the General Secretary.

In the double cycle of this strategic guiding ideology contains a lot of changes proposed during the 13th Five-Year Plan, we put forward the five development concepts, put forward the supply-side structural reform, put forward the three major battles, etc., the development of the enterprise is very important, the 14th Five-Year Plan will be put forward some new ideas, here I just briefly summarize. I think the first from the supply side we put forward to independent self-reliant scientific and technological innovation to drive the modernization of the industrial chain, which is the main line of our new stage of enterprise development, independent and self-reliant to achieve unity, to promote the high-end of the enterprise industry chain, modernization, so as to achieve the security of the industry chain, this is the 14th Five-Year Plan period of the important guiding ideology of the supply side of the supply side of us.

What is the important guiding ideology of the demand side? We seldom talk about demand during the 13th Five-Year Plan, we feel that the demand is great, our enterprises as long as the production of all kinds of products do not worry about selling, but the actual situation is not like this, so we are now particularly important to expand domestic demand as a strategic base, China's potential space for domestic demand is very large, 1.4 billion people, 400 million middle-class people, the per capita GDP of 10,000, the per capita income of 30,000, the average per capita consumption of 20,000, the absolute level of the absolute level is very low so that the potential space is great. Space potential is great, but the potential is potential, some children only potential for life, can no longer become a talent, so you have to face the reality of demand, we face China's domestic demand is not on the rise but in the decline, so in this case we have to put forward in the 13th Five-Year Plan period of the double cycle of the concept of how to stimulate the domestic demand to the up, so expanding domestic demand as a strategic base, which is the demand for double cycle

The above space is a good place to start.

What does the above spatial cycle depend on? A previous expert mentioned the hub, we also agree, but a larger scope is the city cluster, we are not 34 provinces such a concept, we are 19 city clusters, there are central cities, core cities, small cities, to form a spatial cycle of the organizational structure, so we are a new urbanization of the rural revitalization strategy of the combination of the development of the city clusters, why is the Yangtze River Delta is good, Shanghai is good, Suzhou, Hangzhou is better, because we feel that the new towns and villages in the countryside revitalization strategy is the development of the city clusters. Hangzhou is better, because people feel that the Yangtze River Delta is too convenient, that is, the volume of a city cluster is constantly accelerating the integration of people, logistics, information flow, capital flow accelerate the circulation of such a city cluster is very dynamic, so in the past few years the development of a very good is the city cluster of the radiance, influence, import, attraction of the increase in these places, Zhengzhou City Cluster, the Hefei metropolitan area, Wuhan metropolitan area are developing very well.

External, we have to open up to a higher level, opening up can also be added to the noun, the General Secretary of the 30th anniversary of the opening up of the Pudong especially about the institutional opening up, how to do a good job of institutional opening up of this big article, how to understand what is called the institutional opening up, the original we engage in the FTZ is the integration of trade, investment, financial reform, and now put forward a higher standard of opening up of the institutional opening up is the rules of openness, the opening up. Rules of openness. What do you mean by institutional liberalization? It is the combination of systems and rules, this big article of course, more content, will not expand.

In addition, during the 14th Five-Year Plan period, we have to grasp two bottom lines, a bottom line is security, from the country, of course, we know that we are now facing great uncertainty, in addition to the general secretary of the country's security in several areas, we have emerged in the industrial chain of security issues, the safety of life, the security of science and technology, which are the last two years highlighted the security issues, in addition to the traditional information security and social security, and so on. Traditional information security and social security and so on so security is the bottom line.

During the 13th Five-Year Plan, we proposed that the risk is the bottom line, security is higher than the risk, we are solidly promoting the social *** with the affluent this issue, this we seem to have a high degree of relevance to the enterprise, we realized that the Chinese people say a business way, the way of the big business is what? Benefit to the world, a self-serving enterprise will never be big, so in this regard, we should say that we get the importance of corporate strategy for us. Of course, the outline of the 14th Five-Year Plan will only come out next year at the two sessions, which is based on the recommendations of the Central Committee to you to distill a few things.

The third part, I think related to this is the implementation of the double cycle strategy, this double cycle strategy contains a lot of sub-cycling, we are not to cross the centuries cycle security well, the key is in these cycles of the chain how do you play out our supply-side cycle in fact is to open up the relationship between the three: scientific and technological, financial and industrial relations. The reason why this place, Hongqiao, has become a hot spot is that it plays an important role in the integration of these three aspects: technology, finance and industry. So for our enterprises, it is very important to pass three passes:

First, to increase investment in R & D, increase technological innovation, but not blindly, not that enterprises a big investment in R & D to live, the risk is also very big, some people instead of dying faster, so do not innovate will die, innovation may not live so I think that this inside we must cognize the scientific and technological innovation is the most important enterprise! investment, rather than what we used to call R & D expenditure, which I think in our domestic listed companies in the financial R & D at the beginning of this concept is still relatively prominent, the most important investment is the investment in scientific and technological R & D investment, investment in innovation, so this I think we have to pass this hurdle.

Secondly, you just R & D investment, you scientific and technological innovation, you can not transform out of high-quality products and services, the transformation of the development of high-tech industries, that is not. We are now facing the problem that the number of patents, trademarks and patents can really be transformed into the core power of industrial development, that is very important for the enterprise is how to make scientific and technological R & D into the core competitiveness of our enterprises, to become a scientific and technological innovation-oriented enterprises, we are now in the enterprise, especially in the private sector to be able to count too few, we can cite the example of Huawei, this issue is also a problem, but not a problem, we can not be able to find a solution. We can cite Huawei as an example, and this problem is still very prominent. Why can't a lot of innovations be transformed into productivity? You can not transform the enterprise also dare not scientific and technological innovation, so 80% of our scientific and technological innovation is the design of new products to promote the fee, rather than in the original input, in the key technologies and key equipment and major projects, this is the problem is more prominent place.

The reason is very simple, that is, I just said, the investment risk of scientific and technological innovation is very great, why our domestic enterprises are willing to invest in APP, the digital economy, the Internet, the United States, a lot of biomedicine, life sciences, we all know that because of the short cycle of drug research and development of more than a dozen years, the long of 30 years, a new drug at least to invest 1.5 billion dollars to come out of the results of this long investment and uncertainty. Long investment and uncertainty, enterprises can not afford, how to solve? How can we solve this?

So our finance is not to help you finance, many companies hope that the enterprise can issue debt, build board, you a debt, build a board risk are pressed into your head, so we see a lot of good enterprises recently because of credit problems fell, so the core of the financial chattel finance, risk finance, to help you control the entire investment in innovation in the risk of decentralized management of the financial, this is a good financial, not just give you the money of the financial, not just give you the money of the financial. Not just give you the financial funds, I am talking about science and technology, industry, finance to cycle.

The second demand side, we need to learn to create demand, rather than meet the demand, you want to meet the demand is saturated, we are now a large number of demand is created demand, no bilibili you will not go to see, with bilibili a lot of people go up to see every day, this is the creation of demand, rigid demand is becoming less and less, novel changes in such a creative demand more and more, so enterprises you have to be more and more, so you need to be more and more, so enterprises you have to be more and more. Rigid demand is getting less and less, and the innovative demand is getting more and more, so enterprises should learn to lead and create demand, and lead demand, create demand and stimulate demand with high-end supply, instead of meeting demand, how many enterprises can become great enterprises? It is in his lead and create demand, but you create the demand has a great instability, the same as you drink white wine, Maotai so stable, because it is the basic needs.

So I think in the demand side of this we have to pay attention to, in the spatial cycle in the enterprise to learn to follow the layout of the urban agglomerations to go into a business layout, you do not engage in branches in each province, each city to engage in what outlets, you have to follow the development model, according to the structure of the urban agglomerations to a reasonable layout, you have a reasonable judgment of each city, the central especially praised Chengdu-Chongqing Metropolitan Area, the two urban agglomerations in general, the two cities are fighting with each other, but the two urban agglomerations in general, they are not the same. In this case, the two city groups are fighting with each other, but the two city groups are cooperating to develop very well, so the spatial layout can be adjusted as soon as possible, which is very important.

The international cycle emphasizes two points, the first you can not cope with the next few years of global energy and raw materials and other factors such as sharp changes in market prices, you do not want to be today's vision to judge after four or five years, one or two years after the global situation, the global situation has a great deal of uncertainty and unpredictability, so this requires us to learn to apply financial tools to lock the market volatility risk in the next few years, now the whole country run the risk of market fluctuations. The risk of market volatility, now the country ran to the poverty-stricken areas, Gansu Ningxia, many farmers talked about, these years we launched the insurance + futures to help them a lot of farmers know that insurance + futures have a role to play for him, I do not know how many of our listed companies to use these tools.

Then the global vertical division of labor of the industry chain, which can not be changed, we are talking about now we are chip these high-tech stuck, that there are a lot of industries, of course, we said to do this from start to finish is impossible, the vertical division of labor of the industry chain, which is the key to the global integration of the global economy and the global division of labor, the reason why the efficiency of global trade and investment, you do it by yourself, and then what else? What else is there in the industry chain? So from this point of view we have to assess it, improve the advanced, self-help line and security of our industry chain, so I think all enterprises should bring a new perspective ideas, so we can not well understand the general secretary's judgment on the hundred years of unprecedented changes, so as to study the ecology of the enterprise and the posture, it is very important for us at the moment, thank you!