About the author: Lei Jiazhen, a professor in the Department of Technical Economics and Management of Tsinghua Institute of Economics and Management.

Source: Management of State-owned Assets,No. 1 1 2008.

This paper analyzes the main causes of the once-in-a-century financial crisis in the United States, and discusses the harm of economic development under huge debt and excessive financial innovation to the effective supervision of the government. This paper puts forward some problems that China needs to think about in the face of the American financial crisis. First, what should we do in the face of the global call to save the United States; Second, what should we do in the face of the internal contradictions in China's own economy? We need to reflect on China's current economic development model, China's excessive dependence on foreign economy, and the advantages and disadvantages of RMB's rapid appreciation against the US dollar.

Keywords: financial crisis; United States; China

Step 0 introduce

Recently, a financial crisis broke out in America. As alan greenspan, former chairman of the Board of Directors of the Federal Reserve, said on September 14, the United States is in the midst of a once-in-a-century financial crisis. This crisis is increasing the possibility of economic recession, which will last for a long time, continue to affect the real estate prices in the United States, and even trigger a series of global economic turmoil. Grignard's remarks are not alarmist, which has been partially confirmed by the recent performance of the US financial industry. Three of the five major investment banks disappeared, and the remaining two were changed into bank holding companies. Lehman Brothers entered bankruptcy protection, insurance giant American International Group (AIG) was taken over by the government, and Washington Mutual Bank, the leading savings and loan bank, was seized and taken over. So, why did this crisis happen in America? What is the reason? What does this tell China? These are all issues that we urgently need to pay attention to.

1. The basic causes of the American financial crisis

The United States is a unique power in the world today, accounting for 1/4 of the world's GDP and holding the world currency of the US dollar. It has always regarded being the world's number one in the economic, scientific and military fields as its most fundamental national security strategy. But people are not as good as heaven, and this financial crisis happened in the United States. As President Bush said, the financial market in the United States can't function normally, market confidence is hit, and the financial system is in danger of stopping. In desperation, the US government had to spend huge sums of money to save the market. So, what is the basic motivation of this crisis?

(1) Economic Development under Huge Debt

In the theory of economic growth, Solow revealed the importance of capital (K), labor (L) and technology (T) to economic growth through the total production function Y = F (K, L, T). There is no doubt that the United States has the fastest technological progress in the world, excellent labor from all over the world and the richest capital supply in the world. But the problem is precisely that a considerable part of the total investment of American society is formed by debt. Two-thirds of the economic growth in the United States depends on national consumption, while in Qian Qian, millions of Americans rely on debt to spend more than they need. After 2005, the personal savings rate in the United States was less than 10%. The United States is a world economic power, but it is also the largest debtor. At the intersection of 42nd Street and Sixth Avenue in Manhattan, new york, stands a huge electronic advertising screen "national debt clock", which dynamically shows the rising situation of the total debt of the United States. At some point in June, 1996, 65438+ 14 15 is 514/kloc-0. On September 30th, 2008 (the last day of fiscal year 2008), it was 1002472.5 million USD, and on June 30th, 2008 (the first day of fiscal year 2009), it was increased by10 billion USD. The United States flaunts itself as an economic development model dominated by domestic demand. Among them, real estate and cars are the most important domestic needs of Americans. However, under normal circumstances, houses in the United States are very expensive, which is several times or even dozens of times more than the average person's annual income. Therefore, financial institutions have launched subprime mortgages to help poor people with poor credit records buy houses, encourage overdraft consumption, stimulate demand, and promote rapid economic operation and sustained growth. However, this kind of loan has a long cycle, which takes up a lot of liquidity of financial institutions and will inevitably affect the capital turnover of financial institutions. Driven by the profit motive, the institutions that provide secondary guarantee for mortgage companies also came into being. Sub-prime lending institutions package temporarily irrecoverable loans, convert them into various forms of bonds and push them to the financial market, and financial institutions or individuals are willing to buy them. Financial institutions continue to lend after withdrawing funds. The quasi-state-owned "Freddie Mac" and "Fannie Mae" (referred to as Fannie Mae) in the United States are the largest buyers of subprime bonds, and their sources of funds are also raised from the capital market. It also transfers risks to more institutions and individuals by issuing a large number of financial derivatives. It is estimated that the total amount of housing or guaranteed housing mortgage loans held by Fannie Mae and Freddie Mac is as high as 5 trillion US dollars, of which more than 3 trillion US dollars are held by American financial institutions and about/kloc-0.5 trillion US dollars are held by foreign investors. It is not difficult to see that the economic development of the United States is on a long debt chain to a considerable extent, and it is difficult for the whole economy to move forward steadily.

(2) Excessive financial innovation makes it difficult for the government to effectively supervise.

In the past few years, in order to meet the needs of residents' borrowing and consumption and corporate financing, Wall Street financial institutions have created a large number of financial derivatives to amplify the domestic demand bubble in turn. Since the 1960s, Wall Street has invented thousands of financial derivatives, of which more than 50 have survived. Many of them imply high risks, and the risk factors in the economy, especially in the financial system, are naturally magnified. Schumpeter once said, "Innovation is the destruction of creativity". The excessive innovation of American financial derivatives has also brought trouble to the American economy. For example, Lehman Brothers combined credit and subprime mortgage to innovate credit risk transfer derivative products, which is a high-risk financial derivative product, which certainly boosted the development of the real estate industry, but the subprime mortgage crisis in the first half of 2007 just became the fuse of this once-in-a-century financial crisis. There is a simple reason. Once this "chicken lays eggs, eggs lay chickens" type of debt risk transmission exceeds a certain level, it is impossible not to trigger a financial crisis.

In addition, countries and regions including the United States, Britain, European Union countries and Japan account for 80% of the total global financial assets, of which the United States accounts for the majority. It is generally believed that the supervision of financial markets in the United States is lenient and strict. In fact, it is difficult to be strict. The whole society in the United States revolves around capital transfer. There are many kinds of financial derivatives, their spread is uncontrolled, and the transaction volume is large, which greatly exceeds the scope and ability of government supervision. Therefore, whether it is neglected or difficult to supervise, the wandering, flooding and spreading of various financial derivatives may make small mistakes in the operation of the financial system accumulate and turn into crises. Taking the formation of the subprime mortgage crisis as an example, American commercial banks and housing loan companies reduced the loan conditions, issued housing mortgage loans to families with poor repayment ability, and then turned the loans into bonds (called housing mortgage-backed bonds) to enter the financial market. Investment companies and hedge funds use it as collateral to issue financial products called mortgage debt bonds. Such repeated issuance of bonds has led to the emergence of mortgage debt bonds and more and more financial derivatives. Insurance companies are also unwilling to be lonely, and have opened up insurance business specifically for bondholders. Once the bond price falls, the insurance company will pay the losses to the bondholders or purchase the insured debt at the original price of the bond. It is estimated that the average leverage ratio of Wall Street is 14.5 times. Although financial leverage is an amplifier of profits, it has also become an amplifier of financial risks. Can such financial innovation be managed by the US financial regulatory authorities?

2. Facing the financial crisis in the United States, China needs to think.

(1) What should China do in the face of the global call to save the United States?

The dollar is the world currency, the United States produces dollars, and the world uses dollars. The United States has become a "global note-issuing bank" dealing in US dollar bills. The paper money created by the United States through the right to issue paper money is exchanged for any valuable goods in the world. Issuing dollars can make the United States rich. The global circulation of dollars is more than three times the size of the American economy. The United States implements deficit finance in China. It is estimated that the gross national product of the United States in 2008 is 13.84 trillion US dollars, but the fiscal deficit has now reached 10.6 trillion US dollars. Recently, the Federal Reserve and the Ministry of Finance plan to jointly throw out 700 billion dollars to rescue the market. Together, the US fiscal deficit will reach $65,438 +0 1.3 trillion, accounting for the US fiscal deficit in 2008. It is estimated that this $700 billion will be obtained by issuing national debt, and this national debt must be paid by the whole world, that is, countries with US dollar reserves. China has more than10.8 trillion foreign exchange reserves. As of June 2008, China's holdings of US Treasury bonds have reached more than 500 billion US dollars, making it the second largest holder of US Treasury bonds after Japan. In the past year, Japan reduced its holdings of US Treasury bonds by $36.3 billion, while China increased its holdings by tens of billions of dollars. In order to offset the excess liquidity caused by foreign exchange, China's central bank has continuously issued central bank bills for open market operations, and its coupon rate has exceeded the interest rate of the purchased US Treasury bonds. Therefore, the yield of China's foreign exchange reserve assets has been far lower than the regulatory costs brought by these reserve assets. Do we still have to pay the bill in the face of the new national debt that the US government may issue? It is worth noting that the bond investment of Chinese banks in the United States should not be underestimated. According to the data disclosed by listed banks, by the end of June 2008, the total book value of Fannie Mae and Freddie Mac bonds invested by six listed banks (groups) was about $25,365,438 million+$80 million. In fact, there are 14 banking institutions in China * * * investing in American Fannie Mae and Freddie Mac bonds. In addition to the six listed banks, there are some other banks. By the end of June 2008, financial institutions in China * * * held about $365,438 billion in corporate bonds related to Fannie Mae and Freddie Mac. Among them, the bonds guaranteed by the two companies exceeded $654.38+07 billion, and the bonds issued by the two companies were about $654.38+04 billion; The five major banks * * * hold more than $20 billion in bonds related to Fannie Mae and Freddie Mac, accounting for about two-thirds of the total (including $654.38 billion in bonds guaranteed by Fannie Mae and Freddie Mac and more than $654.38 billion in bonds issued by Fannie Mae and Freddie Mac); Policy banks hold more than $6 billion in bonds related to Fannie Mae and Freddie Mac (most of them are bonds guaranteed by Fannie Mae and Freddie Mac, and the bonds issued by the two companies are about $600 million); Joint-stock commercial banks hold more than $2 billion in bonds related to Fannie Mae and Freddie Mac ($6,543.8+0.5 billion in bonds guaranteed by Fannie Mae and Freddie Mac, and more than $600 million in bonds issued by Fannie Mae and Freddie Mac). Based on this, in order to reduce our own losses, it seems that China must cooperate with the United States to rescue the market. Some media said that in the face of the financial crisis in the United States, the attitude of the China administration is far firmer than that of the Western allies of the United States, and China will choose to rescue the market with the United States; In the financial crisis to save the United States, China and the United States have shown that they are in the same boat. Thinking about this issue from the perspective of long-term strategic cooperation between China and the United States is a position that China must hold, but it may be a difficult problem to improve the strategic interest relationship with the United States by saving the financial crisis in the United States.

(2) Facing the internal contradictions of its own economy, what should China do?

From 1978 to 30 years of reform and opening up, China's GDP in 2007 has reached 24661900 million yuan. This is undoubtedly gratifying! However, in the face of the complicated and changeable international situation and the contradictory domestic economic operation, we often have to think about "will there be a crisis in China's economy". To answer this question correctly and draw lessons from the American financial crisis, we need to reflect on our own problems and even some macro ideas. First of all, we need to reflect on our current economic development model. At the beginning of 1988, China put forward the "strategic concept of economic development in international circulation", that is, it proposed to further expand the opening up of coastal areas and develop the export-oriented economy of labor-intensive processing industries, on the one hand, to solve the problem of rural surplus labor, on the other hand, to obtain foreign exchange funds necessary for China's economic development in the international market. One of the key points of this strategy is to make full use of China's rich human resources advantages, vigorously develop labor-intensive industries in coastal areas, and vigorously engage in processing materials and materials; Coastal processing industry puts the two ends of production and operation (raw materials and sales markets) on the international market to solve the contradiction between coastal and inland areas in these two aspects. It should be said that this strategic model has made great contributions to the rapid development of China's economy in the past 20 years, but some distortions in actual operation have also brought great troubles to China's economy. For example, we hope to put the two ends of production and operation (raw materials and sales markets) on the international market, that is, to obtain raw materials from abroad, process them into finished products and sell them on the international market. Objectively speaking, some regions and enterprises have achieved this, but quite a few regions and enterprises have deeply explored local resources, processed them, sold them abroad, and even directly exported domestic mineral products. Objectively, the intensification of domestic resource shortage has a lot to do with this practice. In 2007, China's foreign trade surplus was more than $260 billion, of which how much?

Is it formed by digging deep into domestic resources, processing them and selling them abroad, or even directly exporting domestic mineral products? This is a problem worthy of deep concern. Second, we need to reflect on our excessive dependence on foreign economies. On August 5, 2008, the National Bureau of Statistics published the second quarter economic review article on its official website, saying that China's economic dependence on foreign countries has exceeded 60%. According to relevant documents, the total import and export volume of China in 2007 reached $2 167 billion, of which $0/2210 billion was exported and $94.6 billion was imported. Objectively speaking, the dependence on foreign trade is high, and the international economy will have a great impact on China's economy. This phenomenon was particularly prominent in 2007. From June to September, China's dependence on foreign trade reached 7 1%, the highest level since the founding of the People's Republic of China. Although foreign-funded enterprises account for 77% of the 200 enterprises with the largest export volume in China; Among the 500 enterprises with the largest import and export volume, foreign-funded enterprises account for 62%. In other words, a large part of China's huge foreign trade is caused by foreign-invested enterprises in China, especially in terms of exports, the exports of foreign-invested enterprises are greater than those of other enterprises. From 200/kloc-0 to 2004, the export of foreign-invested enterprises accounted for 50. 1%, 52.2%, 54.8% and 57. 1% of China's total export respectively. But these enterprises are legal entities in China after all, and less than half of the export enterprises are Chinese-funded enterprises. When the financial crisis occurred in the United States, the economies of China's main trading partners (the United States, European Union countries, Japan, South Korea, etc. ) will inevitably be negatively affected, and a series of negative effects will inevitably be passed on to China's export enterprises, which will further affect the steady operation and sustainable development of China's economy through the technical and economic ties between industries. If we say that in the United States, the financial crisis is likely to trigger a crisis in the real economy; With the slowdown of international economic growth, China's real economy is likely to be damaged earlier than that of the United States because of its high dependence on foreign economy.

Third, we should reflect on the advantages and disadvantages of RMB's excessive appreciation against the US dollar. Undoubtedly, according to the purchasing power parity theory, the RMB should appreciate. Specifically, a moderate appreciation of the renminbi can bring four benefits to China, such as expanding domestic consumers' demand for imported products and making domestic consumers get more benefits; Help to reduce the cost burden of imported energy and raw materials; It is conducive to promoting the adjustment of China's industrial structure and improving China's position in the international division of labor; It will help to ease the relationship between China and its major trading partners. However, if the appreciation of RMB is too large and too fast, there will be four disadvantages, such as the impact on China's export enterprises, especially labor-intensive enterprises; It is not conducive to the introduction of foreign direct investment in China; The impact of RMB appreciation on export enterprises and overseas direct investment will eventually increase domestic employment pressure; The huge foreign exchange reserves are bound to face the threat of shrinking. The reality is that after the appreciation of RMB, the cost pressure of export enterprises has increased, and some enterprises even find it difficult to continue to operate, including those enterprises that dig a lot of domestic resources, sell them abroad after processing, or even directly export domestic mineral products, and crack down on regional behaviors and corporate behaviors that only care about local interests and ignore the overall situation of the country. This will undoubtedly contribute to the sustained development of our economy. However, the rapid appreciation of RMB also has great negative effects, even though the national wealth represented by China's foreign exchange reserves has shrunk dramatically. Before and after RMB appreciation, the exchange rate against the US dollar changed from about 8.2: 1 to about 6.9: 1, and the RMB appreciated by about 15.8%. At present, China's foreign exchange reserves exceed 1.8 trillion, and the appreciation of RMB is about 15.8%, which is equivalent to the decline of national wealth represented by foreign exchange reserves 15.8%, which is about US$ 284.4 billion, exceeding our foreign trade surplus (US$ 260 billion) in 2007. If this is the case, it is equivalent to the loss of 28 aircraft carrier formations (the value of each aircraft carrier formation in the United States) and a considerable number of regions and enterprises earn foreign exchange by digging deep into local resources and selling them abroad. We are equivalent to using the increasingly scarce mineral resources and cheap labor in China to earn funds for the construction of 28 aircraft carrier formations, and the results will be returned to Americans through the appreciation of RMB.

3. Concluding remarks

The once-in-a-century financial crisis in the United States occurred in the context of global economic integration. On the one hand, it is likely to lead to changes in the international monetary status of the US dollar; On the other hand, based on the current status of the dollar, the financial crisis in the United States is also likely to trigger a global financial crisis, even a real economic crisis. Especially due to China's excessive dependence on foreign economy, especially foreign trade, the impact of the US financial crisis on China's economy is likely to lead to the disaster of China's real economy, especially the manufacturing industry, so we must keep a high degree of vigilance.

refer to

1. Lei, Theory and Method of National Economic Security Research, Economic Science Press, 2000.

2. Lei Jiazhen. Theory and Strategy of Foreign Economic Security Research, Economic Science Press, 2000.

3. Fan Gang, the US election has limited impact on the implementation of the rescue plan, CCTV Economic Channel, September 27, 2008.

4. Japanese Prime Minister Taro Aso, this American financial storm can be compared with the economic crisis of 1929, China News Network, 10, 200810, 7 October.

5. President of the European Central Bank calls for radical reform of the global financial system, China News Network, June 8, 2008.

The 30th anniversary of reform and opening-up, what are the successful experiences of China finance in the past 30 years? I will focus on how to sum up the lessons of the American financial crisis.

First, moral hazard and human greed. It is said that the greed of Wall Street is only a phenomenon, which conceals the importance of the system in restricting social and economic activities. The characteristics of human greed not only exist now, but also in recent years. It is the natural result of thousands of years of human evolution. Why didn't the greed of the past 60 years after the Bretton Woods system produce such a big American financial crisis that affected the global real economy as it does today? Moreover, greed is not the patent of Wall Street or Americans, but people in other countries and investment banks in other countries. But why didn't the world-famous financial crisis happen in those countries and investment banks? Therefore, greed is only people's subjective initiative, and whether greed can lead to great events requires institutional soil.

Second, financial innovation and high leverage. High leverage did catalyze and amplify the subprime mortgage crisis in the United States, but after all, it was a technical reason, not the real reason behind the US financial crisis. From pure theoretical analysis, high leverage is a tool to incite and amplify financial products and credit multiples. If in a country where credit is controllable and willing to control the total amount of credit, the government is willing to automatically control the total amount of credit, that is, it is not easy to cut interest rates or even raise interest rates, the leverage effect will naturally decrease and the total amount of credit will be difficult to break through. In the case of unbalanced structure of credit instruments, at most, the market share of different credit instruments changes. The question is, why did the Federal Reserve continue to lower interest rates after 200 1 and let credit instruments continue to enlarge credit multiples? Why did the securities regulatory authorities voluntarily give up the restrictions on high leverage in 2004? This is the essence of the problem.

Third, financial supervision is weak. The outbreak of this round of financial crisis in the United States, from now on, the whole world believes that there are indeed factors of poor supervision. But what I want to ask is, why didn't the US government and the Federal Reserve think it was poor supervision before the crisis broke out? What does this mean? It shows that the top decision-makers of macro-policy in the United States value not the regulatory reasons, but that by continuously promoting the strategy of financial globalization and knocking on the financial door of other countries, as long as the United States maintains the net financial income, the high savings and low consumption of other countries can always support the pattern of high consumption and low savings in the United States. Therefore, from today's point of view, the superficial cause of the financial crisis is poor financial supervision, and further analysis of its deep-seated reason is that the macro policy of the United States has made mistakes. It was the United States that was not prepared for this round of economic globalization, made a wrong judgment, desperately expanded its credit, and set fire to its backyard.

Fourth, what are the deep-seated institutional reasons? Mistakes in other countries' macro-policy decisions often lead to a serious decline in their own economies. The emergence of such a once-in-a-century crisis has had such a great impact. Why? Because there is no right to issue major international trade settlement currencies and official reserve currencies. The United States has mastered the right to issue the world currency, which makes it possible for the United States to make globalization mistakes. The ratio of current account deficit to GDP in the United States in recent years is very telling. This crisis has made all countries in the world understand, but the instability of the US dollar is an extremely important factor when the global economy fluctuates violently. Because today's world economic cycle is basically dominated by the dollar, this crisis has made all countries in the world understand the current international monetary system, which has provided the institutional possibility for the United States to make such a big mistake.

By summing up the lessons of the United States, China gained enlightenment from it:

First, China's long-term export-oriented economy is unsustainable after it grows to a certain scale. Bush once criticized that "Wall Street was drunk". I'd like to add. Who sent the wine? He doesn't drink now and has no money. What about wine producers? Who will spend the flowers? Or do wine producers not produce wine or switch to other mineral water? This is a problem of the world economic structure.

Second, all kinds of financial instruments and financial products are technical and neutral in nature. The key depends on how to handle the relationship between credit, money supply and credit. Moreover, in the case of high leverage ratio and cross-selling of financial derivatives, it is necessary to further study theoretically what is the maximum border credit of an economy. For example, asset securitization can improve financial efficiency at the micro level, but at the macro level, its significance is different in different environments.

Third, financial innovation is the driving force of China's financial development in the past 30 years, and financial innovation is also the driving force of China's financial development in the next 30 years. However, what we have to ask in the past and now is, what are we innovating? When to innovate? It is not a simple and timely imitation of the latest financial technology and tools in the world today. What are the positive and negative experiences and lessons of China in the first 30 years of reform and opening up? As I said in 1988, "in every period, the development of financial market system should be based on the principle of solving realistic contradictions." "The slogan of reformers should be: What can be done now, not what should be done."

Fourth, economy is primary, and finance is secondary after all. The success of financial development depends not only on a single financial indicator, but also on indicators for stabilizing economic growth. If the economy develops steadily and healthily, even if it is "backward", "irregular" and "underdeveloped" compared with the dogma in textbooks, it may not be a bad thing. For example, the rapid growth of financial assets is not necessarily a good thing, depending on the preconditions. In the past, we used to sum up the achievements of increasing savings deposits. Now that the financial market structure is rich, when the credit expands rapidly, the loan growth may not be fast, but it can be manifested as the rapid growth of financial assets, which often means that there are great risks lurking. Therefore, whether we do a good job in financial industry, develop financial industry and carry out financial innovation depends on our customers and on the stable development of our economy.