China's financial-sector challenge
China's massive underemployment problem an army of surplus labour estimated at 200m people has been characterised as the underlying imbalance in the world economy. Some argue that China's salvation can only come from the dynamic foreign-financed export sector because the domestic financial sector is moribund and irremediable. China's exchange rate policy is seen as essential to this approach. However, the exchange rate is not the only determinant of the growth in exports. World Trade Organisation accession, rapid productivity growth and good infrastructure have played key roles as well. More importantly, at this stage of its development, China could not continue thriving on a predominantly export-oriented growth strategy. Given the country's size, development of domestic demand will be essential to long-term stable and sustainable growth of output and employment. This, in turn, will depend critically on reforming and further developing the financial sector.
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In China, national savings amount to almost half of gross domestic product. For a developing economy, high saving has the benefit of providing cheap and abundant capital that can help generate strong growth. For want of other financial investment opportunities, however, most Chinese savings end up as deposits in state-owned banks, which have done a poor job of intermediating the funds. This money has helped fuel a recent investment boom, with gross investment now amounting to about 45 per cent of GDP. Much of this has been concentrated in a few sectors such as steel, cement and carmaking where it may not always be productive and could cause a build-up of excess capacity. Thus, even as China has become the world's manufacturing workshop, the financial system has been accruing unproductive assets by continuing to support old domestic-oriented companies. This growth strategy is like filling a bucket that has a big hole in the bottom. Fixing the banking system would help plug the leak. The Chinese government clearly views this as a crucial reform priority. Incentive systems are gradually being changed and the recent liberalisation of lending rates will eventually help banks make more commercially oriented lending decisions. The government has also long argued that such domestic reforms are essential for stable and robust long-term growth and are far more important than exchange-rate flexibility.
But financial-sector restructuring cannot be divorced from other policies. For instance, maintaining a fixed exchange rate reduces the independence of China's monetary policy. In the face of capital inflows and pressures for appreciation, the government is forced to keep interest rates low. This implies cheap, subsidised capital to banks and companies. The government then has little choice but to use measures such as moral suasion to control growth in lending and investment. This is not consistent with training the banking system or state enterprises to respond to market incentives.
With investment growth at unsustainably high levels, less repressed interest rates would give banks strong incentives to assess risk more carefully and price loans based on commercial considerations. This would impose a higher cost of capital on weaker companies, thus reducing their profits and making it harder to justify lending to state enterprises that are only marginally viable. This could also help reorient lending towards relatively efficient private sector enterprises.
But would such measures not depress domestic demand? And worse, would a decline in investment not reduce China's long-term growth prospects? We think not. First, if the efficiency of investment improves and thus provides a higher expected return on saving, the fraction of income that is saved by individuals, who may be targeting a particular level of post-retirement saving, could fall. Second, if more careful investments reduce the risk of boom-bust cycles, households would have less need for precautionary savings. Moreover, a high investment rate is hardly the way to economic nirvana if such investment is misdirected with scant regard for commercial principles.
Given the importance of China's banking sector within the financial landscape, restructuring the banks is a key priority. But development of the broader financial sector, including equity and bond markets, is crucial as well. This would provide much-needed competition to the banks, giving savers a wider range of investment and borrowing opportunities and giving companies alternative sources of funding.
There is, unfortunately, no clear template for financial-sector development and reform. And there are numerous risks associated with developing these markets, which will require careful supervision. In tackling these challenges, it would help Chinese policymakers to do away with the constraint of maintaining a fixed exchange rate and the distortions that this requires.
Eswar Prasad, former head of the IMF's China division, is chief of its financial studies division. Raghuram Rajan is economic counsellor and director of the IMF's research department
中国金融改革比出口更重要
中国面临严重的就业不足问题，剩余劳动力总数估计高达2亿，人们将其视为世界经济的潜在失衡因素。有人争辩说，中国唯一的出路，就是依赖活跃的、有外资提供融资的出口业，因为中国的国内金融业病入膏肓，无可补救。这些人认为，中国的汇率政策对这种战略非常关键。
然而，汇率不是决定出口增长的唯一因素。加入世贸组织、生产率的快速增长、良好的基础设施，这些也都扮演着关键角色。更重要的是，在目前发展阶段，出口导向型增长战略已经不能拉动中国的持续繁荣了。鉴于中国的规模，要实现长期稳定及可持续的产出与就业增长，发展内需是十分必要的。而这取决于中国能否改革并进一步发展金融业。
在中国，国民储蓄率几乎达到国内生产总值(GDP)的一半。对一个发展中国家来说，高储蓄率有其好处，它提供了便宜、充足的资金，有助于推动强劲增长。但是，由于缺乏其它金融投资机遇，大部分中国储蓄都存在国有银行，而这些银行资金运用业绩很差。受这些钱的刺激，中国近期出现投资热，总投资额约占GDP的45%。大部分投资集中于少数几个领域，如钢铁、水泥、汽车制造，这些投资未必有成效，还可能造成产能过剩。
因此，即便在中国成为世界工厂之际，其金融体制却一直在支持内向型老企业，因而不断积累不良资产。这种增长战略，就如同向一只底部有洞的水桶注水。解决银行体制问题会有助于堵住这一漏洞。
中国政府显然已将此列为关键改革重点。银行的激励体制正在逐步改变，最近贷款利息也在放开，这些都将最终帮助银行在贷款决策中更多从商业角度考虑。政府一直表示，这类国内改革是稳定、强劲、长期增长的必要条件，其重要性远远超出灵活汇率。
但是金融业的重组无法和其它政策割裂开。例如，保持固定汇率会削弱中国货币政策的独立性。面对资本涌入和升值压力，政府被迫保持低利率。这意味着银行和企业可以获得成本低廉的补贴资金。在这种情况下，政府别无选择，只能运用道德说服之类手段来控制贷款和投资的增长，这与促使银行体系及国有企业适应市场调节机制的思路不符。
在投资增长处在不可持续的高水平之际，如果放松利率管制，银行会更有积极性，对风险进行更审慎的评估，而且会根据商业考虑对贷款进行定价。这样一来，业绩较差的企业获得资金的成本就比较高，利润会降低，这使银行更难有理由贷款给本来就在勉强维持的国有企业，或许还有助于贷款流向效率较高的私营企业。
但是这些举措会不会压制内需呢？甚至更为严重，由于投资下降而影响中国长期增长的前景呢？我们认为不会。第一，如果投资效率得到改进，储蓄回报提高，个人收入中储蓄的比例可能会下降， 因为个人的目标也许是要达到退休后所需的特定储蓄水平。第二，如果谨慎投资能够减少繁荣/萧条周期的风险，家庭对防备性储蓄的需求可能会减少。还有，假如投资无视商业原则，而被导向不值得投资的领域，光靠高投资率是很难达到理想经济状态的。
在中国金融业中，银行业的重要性非常大，因此银行重组是关键重点。但是，发展包括股票和债券市场在内的更为广泛的金融业，同样也很关键。这会给银行带来其十分需要的竞争，也给储蓄者带来更多投资和借贷机遇，并为企业提供其它融资渠道。
不幸的是，金融业的发展和改革尚没有一个明确的样板。发展这些市场也还有无数风险，这都需要进行审慎的监管。如能解决这些挑战，中国决策者就能摆脱维持固定汇率的羁绊，消除与之相关的各种扭曲经济行为。
埃斯瓦尔?普拉萨德(Eswar Prasad)是前国际货币基金组织(IMF)亚太部中国项目负责人，现为其金融研究部主管。拉古拉姆?瑞占(Raghuram Rajan)是国际货币基金组织研究部经济顾问和该部主任。
