Recently, the Shanghai A-share index fell below 3,000 points again, and the capital market is still in a downturn for nearly a decade, social wealth continues to shrink, and social investment and consumption power continue to be weakened. This means that the 3,000-point defense battle has failed again, and at the same time, it means that a series of rescue measures such as suspending IPOs, controlling the pace of new stock issuance, and restricting the size of non-circulation have not only failed to achieve the expected rescue effect, but also will have adverse consequences for the long-term development of the capital market due to the reduction of the operational efficiency of the capital market.
First, the development of the capital market requires theoretical and strategic determination
The development of the economy requires strategic determination, and similarly, the development of the capital market also requires strategic determination. Strategic determination comes from theoretical determination. Stand tall to see far. If there is a lack of correct theoretical guidance and theoretical self-confidence, then it will be impossible to produce theoretical determination, and then it will be impossible to produce strategic determination. In the absence of theoretical and strategic determination, the bailout policy is easily swayed by noisy public opinion. It's dangerous. Therefore, to develop the capital market, save the domestic stock market, and participate in global capital competition, it is urgent to form a theoretical determination and build a strategic determination.
The essence of capital is not money and things, but the specific relations of production produced by the development of the social productive forces to a specific historical stage and formed to promote the development of the productive forces. To put it simply, the essence of capital is not a thing, but a relation of production. This relation of production manifests itself in the form of capital and institutions. The life of capital lies in movement. It is only in the process of movement that capital can complete the preservation and multiplication of value, and losses may also occur. Capital markets are the product of capital movements. In the process of continuous circular turnover of capital, the capital market is not only the result of capital movement, but also the premise of capital movement. The essence of the capital market system produced by the movement of capital is not a thing, but a relationship of production, which is embodied in various financial systems, financial instruments, and trading rules designed through people's subjective will to adapt to the development of productive forces. The capital market system is the carrier of specific production relations and financial systems, and like all other political and economic systems, it embodies efficiency and fairness.
Under the socialist system, the principle of efficiency and fairness of the capital market is embodied in the universality and particularity of the capital market. Without understanding the universality and particularity of China's capital market, it is impossible to create a capital market that takes into account both efficiency and fairness.
Second, the development of the capital market needs to abide by the principle of universality
To develop the capital market, a socialist country first needs to abide by the universal law of the capital market and use this to guide the institutional building of the capital market. The universality of China's capital market refers to the commonality between the domestic capital market and the capital market in other parts of the world, that is, the domestic and foreign capital markets must adopt mutually understandable trading systems and trading concepts; Among them, improving the efficiency of resource allocation, enhancing the growth of social wealth, avoiding the shrinkage and loss of wealth, and promoting investment and consumption are the common goals pursued by domestic and foreign capital markets.
According to the principle of universality of the capital market, the standards for the establishment of private equity investment funds, the standards for the issuance and listing of new shares, the standards for information disclosure of listed companies, the standards for non-reduction of holdings of large and small enterprises, the regulatory standards for secondary market transactions, and the standards for violations of laws and regulations and compensation should be consistent with those of the relatively mature Western capital markets, and the universal principles and practices of the mature markets in the West should be studied, studied and learned.
Starting from the principle of universality, through comparative research, it can be found that the main problems in China's capital market at present are:
(1) The base currency is not directly linked to the stock market; As the heart of the real economy, the stock market has still not become a financial hub for the central bank to release liquidity. Monetary policy can ignore the lack of blood supply to the heart of the economy and the shrinking wealth of society.
(2) The standard of punishment and compensation for violations of laws and regulations is lower than that of mature western capital markets, for example, if there is no sufficient deterrent compensation and punishment system for investors due to financial fraud, enterprises and major shareholders can be passively delisted and withdrawn.
(3) The difficulty of issuing and listing new shares, the layer-by-layer increase and arbitrariness of the supervision of secondary market transactions, and the new non-reduction thresholds are much higher than those in mature Western markets. For example, because the auditors have a different understanding of accounting standards, or because the auditors cannot understand the company's business model, or in order to control the pace of new share issuance and listing, the exchange auditors can find an insignificant reason to return or reject the company's listing application; For example, investors in the secondary market sometimes receive a phone call from the exchange asking him to explain why they want to buy a certain stock, and the investors' investment freedom and investment rights are not respected as they should be, and some investors withdraw from the secondary market because of this. For another example, according to the regulations, venture investors holding more than 5% of the shares can sell shares in the secondary market after submitting an application to the exchange to reduce their holdings through the listed company, but the exchange refuses to issue a reduction announcement on the grounds of the stock market downturn, so that these risk investors cannot actually reduce their holdings, and so on.
Listed companies and pre-listed companies are the most active and growing market players in China's economy, the engine of economic growth and industrial upgrading, and the most important scarce resource that can provide a long-term source of tax revenue. If the capital market reduces the efficiency of capital supply for such economic entities, the result will either inhibit the country's economic development and industrial upgrading, or force such scarce strategic economic resources to be listed abroad. Once a domestic enterprise moves to an overseas listing and leaves the territory of the renminbi, such an enterprise will in fact become a comprador enterprise controlled by the overseas capital market. Comprador enterprises are a funnel for the loss of national wealth. A large number of new economy enterprises such as Lenovo, JD.com, Alibaba, Baidu, Meituan, and ByteDance have been listed overseas, becoming pawns on the US dollar economic map, taking away trillions of profits every year, and providing a strong value endorsement for US dollar banknotes, while continuing to weaken the value of the RMB. The consequence of all this is that China's capital market's institutions, rules, and regulatory thinking lag behind the mature capital markets of the West, and that it has failed miserably in the process of global competition with them in the competition for scarce resources of listed companies. Regrettably, in order to reverse the downturn in the stock market and bear the crown in the world, the financial management department has not made efforts to improve the operational efficiency of the capital market, but has made efforts to reduce the efficiency of the capital market, that is, to increase the difficulty of listing and financing, increase the difficulty of venture capital withdrawal, and reduce the efficiency of resource allocation in China's capital market. This has led to a sharp increase in the number of outstanding domestic enterprises applying for overseas listings compared with previous years. As the national wealth funnel increases, this will lead to a future in which China's economy is in dire straits.
We choose globalization and embrace the thorny rose, and we will have to face the competition of globalization. The economic competition of globalization is, first of all, the competition between the vitality of the heart of various economies, the competition between the engines of economic growth, and the competition between the amount of funds provided by the capital markets of various countries to their own economies and the competition between their operational efficiency. The capital market is the heart of all market economies, the engine of economic growth and industrial upgrading, and the premise rather than the result of economic development. From this point of view, the stock market is not a barometer of the development of a market economy, but a prerequisite for the development of a market economy. A steadily growing capital market can not only drive investment, but also consumption.
The stock market is also a field of public opinion, and various voices are no less than the vegetable market. Some opinions can be listened to, such as stopping refinancing, prohibiting quantitative trading, shutting down index futures, and strictly creating fake listings; Some opinions should not be heard, such as suspending IPOs and refinancing, restricting large and small non-circulation, and encouraging overseas listings. Distinguishing between right and wrong and sticking to principles requires theoretical and strategic determination.
3. Distinguish between "hoe capital" and "sickle capital"
Capital has the commonality of profit-seeking, but it also has its own personality, so Marx divided social capital into industrial capital, commercial capital and financial capital. In the same way, according to the principles of Marxist economics, we can further subdivide financial capital into two categories: one is the "profit-making capital" that promotes technological progress, supports industrial upgrading, promotes social employment, and increases social wealth (this kind of capital is similar to a hoe for farming, and can also be called "hoe capital"); The other type is the "arbitrage capital" (this kind of capital is similar to the sickle that cuts leeks, which can also be called "sickle capital") that uses modern scientific and technological means to harvest social wealth with the help of financial tools such as refinancing, options and futures, and quantitative high-frequency trading.
The non-tradable shares of listed companies belong to the "profit-making capital" that participates in the creation of social wealth. According to Marx's formula of capital circulation and turnover, the circular turnover between this type of "profit-making capital" (G) and equity (W) can be expressed as: G-W-G-W-G-W—...... The infinite loop turnaround process. The venture capital market or equity investment market is a primary market. The primary market provides the movement process of capital into equity (i.e., G-W) for "profit-making capital"; The secondary market provides the "profit-making capital" with the movement process of equity re-conversion into capital (W-G); Since then, "Profit Capital" has re-entered a new round of circular movement from capital to equity (i.e., G-W). If we strictly restrict the reduction of holdings of "large and small non-profits" in the secondary market and reduce the liquidity of the equity of listed companies, then, in fact, it is artificially creating a "vascular obstruction" in the circulation of "profit-making capital", destroying the circulation of "profit-making capital" to enter the next round, and reducing the efficiency and vitality of the capital market in promoting economic growth, industrial upgrading, and increasing employment. "Profit capital" belongs to long-term capital and "patient capital". If the efficiency of the circulation and turnover of "profit-making capital" is dispensable, can be ignored and arbitrarily manipulated, and can even be blamed for the downturn in the stock market, then does this not show that the reform of equity division that paid a huge price back then was a mistake?
There are two major mistakes in advocating strict restrictions on the listing of enterprises and the non-reduction of large and small enterprises: one is the lack of a view of examining the changes of things in the movement, looking at the problem statically, only seeing the link of equity conversion into capital (W-G), not seeing the next link of capital re-conversion into equity (G-W), and not seeing the continuous movement process of the circular turnover of "profit-making capital"; Second, there is a lack of awareness of global capital competition, and it is limited to looking at the problem from the perspective of the domestic capital market, and cannot see that the precious domestic listed resources will flow to the efficient overseas market for listing and circulation, and the inefficient capital market will lead to the loss of listed company resources, resulting in the loss of the country's capital, tax revenue and employment opportunities.
Small and medium-sized investors in the secondary market are all cheering about a series of rescue measures that reduce the operational efficiency of the capital market, such as restricting the issuance of new shares and the circulation of large and small unlisted shares, but they are wrong. The Shanghai Composite Index fell below 3,000 points again, proving that this kind of self-imposed rescue measure has failed. It is normal for this kind of mistake in public opinion, because most of them do not have the opportunity to study the second volume of "Capital" and do not have the theoretical knowledge of capital circulation and turnover. Therefore, it is normal for some financial experts to pander to this false public opinion. However, the financial regulatory authorities cannot cater to this kind of erroneous public opinion, let alone be dominated by erroneous public opinion. Therefore, we really need to strengthen the basic theoretical research of the capital market, and we need to establish theoretical self-confidence, form theoretical determination, and enhance strategic determination.
The financial regulatory authorities should strictly distinguish between "profit-making capital" and "arbitrage capital", and distinguish between "hoe capital" and "sickle capital". On the one hand, it will support the development of "profit-making capital" by improving the financing efficiency, refinancing efficiency, M&A and restructuring efficiency, and industrial capital withdrawal and reinvestment efficiency of the capital market. On the other hand, through strict supervision, the income tax rate of certain types of "arbitrage capital" will be greatly raised, certain financial derivatives instruments will be abolished, and the living space of "arbitrage capital", that is, "sickle capital", will be compressed, so as to completely reverse the current situation in which "arbitrage capital" squeezes the living space of "profit-making capital" in terms of system.
In the past decade or so, the regulatory authorities have vigorously developed the financial derivatives market, introduced various short-selling tools, and allowed quantitative trading to provide a broad space for "arbitrage capital", that is, "sickle capital", and to integrate with international standards and serve the construction of an international financial center, which is completely wrong. This kind of mistake belongs to the mistake of the line in the development of the capital market, which is similar to the mistake of Wang Ming's line of advocating foreign flattery and rigid dogma during the "Fifth Anti-Encirclement and Suppression" period. The development of China's capital market should also get rid of the modern version of the "Wang Ming line".
Today, China's capital market has in fact fallen into the "Battle of the Xiangjiang River", which has caused China's economy as a whole to fall into a predicament similar to the "Battle of the Xiangjiang River" and cannot extricate itself. Therefore, China's capital market needs a "Zunyi Conference", a historical turning point, and a development path for the capital market with Chinese socialist characteristics in the theoretical thinking and theoretical innovation of the universality and particularity of the capital market. Only in this way can China's capital market shoulder the historical responsibility of China's economy to get rid of the dollar system, rebuild the domestic economic cycle, and realize the strategic transformation of the economy.
Here, we should not only study and grasp the universality of China's finance, but also study and grasp the particularity of China's finance.
Fourth, the particularity of the financial market and the people's nature
The financial market is a core component of the socialist organized market economic system. The socialist economic system is the foundation of the financial market and determines the special nature of the financial market. The particularity of China's finance refers to the people's nature of money and finance under the socialist system. The particularity of China's finance is embodied in the people's nature of the sovereign currency and the people's nature of the capital market.
At the beginning of the founding of the People's Republic of China, China's currency was not called "Zhongyuan", "Huayuan" or "Chinese Yuan" like the US dollar, the Japanese yen, and the silver dollar, but was called "RMB" according to the people's nature of China's currency. These three words summarize the financial particularity of China's currency, that is, the nature of the people. The great wisdom of the founding leader of the People's Republic of China to gain insight into the essence of the sovereign currency of the People's Republic of China is still beyond the reach of today's financial experts and scholars. The word "renminbi" reminds financial managers not to forget the people's nature of the sovereign currency and the particularity of China's finance. If we abandon the particularity of monetary finance and the people's nature, then it will inevitably lead to insufficient blood supply or blood source pollution in the macroeconomy, and form serious economic and social problems.
At present, the root of China's economic problems lies in finance, the root of China's financial problems lies in currency, and the root of China's monetary problems lies in the loss of the people's nature of the base currency. For a long time, the issuance of the renminbi base currency has been mainly bound to foreign exchange reserves, not to the needs of the people's production and consumption, not to the needs of maintaining the health and stability of the capital market, and not to the needs of strengthening the economic base owned by the whole people, thus losing the subjectivity and people's nature of the issuance of base currency.
When the specific form of money has passed through metal money and come to the era of paper money, money not only has the five functions of traditional money, but also increases the function of resource allocation, wealth distribution and monetary capitalization, that is, modern money has eight functions; The anchor of modern money is neither precious metals such as gold nor energy products such as oil. The anchor of modern money is the comprehensive strength and national credibility of sovereign states, military power and state violence. There are also quantitative limits to the issuance of modern money, wherein, under the premise of a certain money multiplier, the upper limit of the issuance of base money is to avoid overheating demand and inflation, and the lower limit of the issuance of base money is to avoid insufficient demand and deflation. In the era of paper money, all theories about what kind of physical object or resource should be used as an anchor of money are meaningless.
As a currency, the renminbi, like all other national currencies, has the duality of currency, that is, the universality and particularity of currency. According to the duality of RMB, the anchorage of RMB can also be distinguished into ordinary anchorage and special anchorage. China's comprehensive national strength and national credit are the ordinary anchors of the RMB, while China's people-centered socialist economic and political systems are the special anchors of the RMB. In other words, the leadership of the Party and the socialist system are the special anchors of the renminbi.
Only by returning the people's nature to the base currency of the renminbi in the financial system, letting the currency power serve the political power and military power, allowing the renminbi to serve the basic livelihood guarantee of the grassroots people, serving the healthy development of the capital market, and serving to promote the strategic transformation of the domestic circulation, can we fundamentally solve the deep-seated problems of China's economy and finance, and let the capital market completely get rid of the predicament and move towards prosperity.
5. Lead the development of the capital market with the people's nature of finance
To do this, we need to do the following:
First, take the people as the center, control "arbitrage capital" or "sickle capital", and encourage "profit-making capital" or "hoe capital". This means that the institutional design of those who hand the knife for "arbitrage capital" must be adjusted, and the financial instruments that cut leeks must be abolished, such as refinancing transactions, quantitative high-frequency trading, stock index futures trading, fraudulent listings, insider trading, stock price operations, etc. must be prohibited; At the same time, it is necessary to remove institutional obstacles to the investment, listing, exit and reinvestment of "profit-making capital", and provide an efficient capital market environment for the financing, mergers and acquisitions and restructuring of listed companies and companies to be listed.
In order to improve the efficiency of the use of raised funds and correct the situation where intermediaries and listed companies jointly push up the scale of over-raised funds and participate in the sharing, the exchange should strictly limit the scale of over-raised funds and strictly limit the over-raised funds to 10% of the planned scale.
Second, establish a currency delivery system that is directly linked to the issuance of base money and the capital market, so that the stock market can become one of the hubs of base currency delivery. It is important to recognize that the three types of base money that the central bank distributes through the money market, the treasury bond market and the stock market have different properties, different roles and different circulation routes. The stock market should become an important channel for the introduction of RMB base currency, the capitalization of RMB, and the provision of stock market liquidity.
In the special period of strategic economic transformation, entity enterprises, as the main force of economic transformation, urgently need to replenish capital. The existing channels of money delivery can only make money congested in the commercial banking system, which is not conducive to the replenishment of capital and economic transformation of enterprises. Only through the expansion of the central bank's balance sheet, the central bank directly purchases treasury bonds, industrial investment funds and stock investment funds, activates the capital market, improves the efficiency of enterprises to go public and finance, and realizes the capitalization of RMB, which can directly help real enterprises replenish capital and drive the demand for working capital. The capital market is a key hub to promote the country's economic transformation and economic growth.
By investing RMB base currency in the capital market and replacing the capitalization of US dollar banknotes in China with RMB capitalization, it is a financial guarantee for China's capital market to retain good enterprises and cultivate emerging high-tech enterprises. The capital market with Chinese characteristics needs to implant the system and mechanism of RMB capitalization, the basic role of sovereign currency in resource allocation and wealth distribution needs to be brought into play through the capital market, and the central bank needs to expand the balance sheet and convert the RMB base currency into national capital. Through the capitalization of RMB, the amount of national capital will be expanded, the proportion of national capital in the whole society will be increased, the leading role and leading role of national capital will be brought into play, the economic structure will be optimized, scientific and technological progress will be promoted, the development of new productive forces will be promoted, the national capital strength will be enhanced, and the foundation of socialist ownership by the whole people will be consolidated.
The establishment of a system and mechanism for the capitalization of RMB through the capital market can not only promote the rise in the price of stock assets, crack down on the short-selling power of the stock market, and improve the efficiency of listing and financing of enterprises, but also strengthen the national capital, consolidate the foundation of ownership by the whole people, and achieve real social equity. The institutional innovation of RMB capitalization is conducive to achieving the dual goals of efficiency and fairness in the capital market.
The particularity and people's nature of China's capital market determine that China's capital market should also stress politics and must stress politics. It is the biggest politics of China's capital market to realize the capitalization of RMB through the capital market, strengthen the capital of socialist countries, and take into account the efficiency and fairness of the capital market, and it is also the fundamental institutional arrangement to solve the dilemma of China's capital market and achieve real prosperity.
Third, China's capital market should prohibit foreign investors from exchanging foreign currencies (including US dollar banknotes) into the domestic capital market for investment, and at the same time, it should support foreign investors to hold foreign RMB to invest in the domestic capital market, and encourage the return of overseas RMB to the domestic capital market.
The dollar does not have the character of the people. The US dollar is a financial tool used by the Western financial monopoly bourgeoisie to sanction strategic rivals, create global instability, and harvest global wealth. The U.S. dollar is a "toxic currency" that hides financial and political viruses. If China mainly determines the issuance of the RMB base currency by foreign exchange reserves, then it will inevitably weaken the people's nature of the RMB; In the same way, if the capital market allows the inflow of dollars and foreign capital dominates the asset pricing power of China's capital market, then it will inevitably weaken the people's nature of China's capital market.
After decades of brainwashing by American financial textbooks, Western financial capital has completed the "ideological colonization" of the domestic financial ranks. They deliberately avoid or simply do not see the financial and political viruses of the dollar, and they have become agents of Western financial interests, either actively or passively. Because of the influence of international financial colonialism, the issuance of the RMB base currency is linked to foreign exchange reserves; This has led to the over-opening of the capital account, and the US dollar banknotes can sweep away a large number of emerging companies to list overseas, and suppress the RMB exchange rate while being endorsed by the US dollar banknotes; As a result, domestic investors, large and small, are counting on dollar interest rate cuts and "northbound funds" to save the stock market, rather than relying on their own currencies to solve the collapse of the index and the shrinking of wealth.
VI. Concluding remarks
In order to get rid of the all-round encirclement and suppression of China by the United States, China needs to get rid of the global dollar monetary system dominated by the United States as soon as possible and establish a global RMB monetary system dominated by China. China's capital market must become a renminbi-dominated capital market, not a dollar-dominated market; The opening up of China's capital market refers to the opening up of global RMB capital, not to US dollar capital. China's capital market should become not only the heart of China's economy, but also the heart of the global RMB monetary system.
To this end, we need to strengthen the basic theoretical research and innovation of monetary and financial institutions; see clearly the universality and particularity of sovereign currencies and capital markets; develop a new theory of monetary function, and apply the capitalization, resource allocation, and wealth distribution functions of modern money; distinguish between "profit capital" and "arbitrage capital", "hoe capital" and "sickle capital"; Focusing on the interests of the people, protecting the wealth security of small and medium-sized investors, and supporting economic development and enhancing employment, we will correct the wrong line and direction of the capital market; Through the equity investment market and the secondary stock market, we should establish a basic currency delivery mechanism and a renminbi capitalization mechanism, enhance the state's capital strength, consolidate the foundation of the ownership system of the whole people, and take back the asset pricing power and dominance of the capital market from the hands of "arbitrage capital" or "sickle capital" to the hands of state capital.
The fundamental way to get rid of the predicament of the capital market mired in the "Battle of the Xiangjiang River" lies in promoting the return of the people's nature of China's finance, in putting the monetary system and the capital market in order, and in changing the issuance of the RMB base currency from the current foreign exchange reserves to the RMB assets that are mainly bound to the capital market.
It is urgent to save the capital market and the heart of the economy.
Saturday, June 29, 2024
(About the author: Yu Yunhui is the chairman of Lantian College and the founding investor of Hongguobao (Public Welfare). ）