Liu Guiping: High-quality development of inclusive finance for
common prosperity
Speech by Mr Liu Guiping, Deputy Governor of the People's Bank of China, at the International
Forum for China Financial Inclusion (IFCFI) 2021, Taizhou, 16 December 2021.
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Dear guests, colleagues, and friends,
It gives me great pleasure to attend this forum. Common prosperity is the essential requirement
of socialism, an important feature of Chinese-style modernization, and the common aspiration of
the people. Finance is at the core of modern economy and plays an important role in economic
and social development. Common prosperity must be taken as an important focus of
our financial work ahead. Today, I would like to share with you some of my views on the theme of
this forum.
1. The basic conceptions and essential characteristics of common prosperity
Adhering to the people-centered philosophy of development, General Secretary Xi Jinping has
made a series of important instructions on realizing common prosperity for all the people, and
elaborated on the issue of common prosperity at the tenth meeting of the Central Committee for
Financial and Economic Affairs. At the recent Central Economic Work Conference, he also
stressed that we should correctly understand the strategic goals of and the practical approaches
to common prosperity. These important statements are insightful and far-reaching. In my
understanding, the key to common prosperity is high-quality development. The two reinforce
each other. Therefore, in pursuit of common prosperity, we need to advance high-quality
development. The primary task in achieving common prosperity is to constantly unleash and
develop productive forces, create and accumulate social wealth, so as to make the "cake" bigger
and better through high-quality development. Given its "common" nature, common prosperity is
the prosperity for all the people, not just for a small population. Egalitarianism and
synchronization are not our goals. We are aimed at rendering distribution more equitable based
on high efficiency, at optimizing the mechanism for primary distribution and redistribution, and at
establishing a reasonable tertiary distribution system appropriate for social governance. It is
expected that the "cake" will be distributed properly under proper institutional arrangements. In
terms of its content, common prosperity refers to richness in an all-round way. It is the richness
not only materially, but also spiritually and culturally. It is the all-round development of the people.
It should be achieved through the coordinated development of economy, politics, culture, society,
and ecology, and through the continuous improvement of basic public services. Common
prosperity is ultimately for all the people. We should always follow the people-centered
development philosophy, uphold the principle that development is for the people and by the
people and that its fruits are to be shared by the people, so as to realize common prosperity for
all. The pathway to common prosperity is persistent endeavor. Happy life comes from hard work
and common prosperity depends on diligence and wisdom. It is an arduous, complicated and
long-term task, so we need to do our best with patience and perseverance. Common prosperity
has distinctive features of the times and is of Chinese characteristics. Our people will work hard
and help each other for the common goals of living a prosperous life, becoming self-confident
and self-reliant, having a pleasant environment, securing social harmony and easy access to
public services. All-round development will be achieved for the people and in the society. People
will share the fruits of reform and development and the overall social progress.
2. Issues of great concerns for inclusive finance in boosting common prosperity
In recent years, implementing the decisions and arrangements of the CPC Central Committee
and the State Council on developing inclusive finance, the financial sector and the other sectors
of the society have put in place an inclusive financial service and security system which is
appropriate for the building of a well-off society in an all-round way. In promoting common
prosperity, inclusive finance needs to take its initiative.
To meet the requirements of the strategic goals of and practical approaches to common
prosperity, we still face many challenges in the high-quality development of inclusive finance, and
thus need to make continuous improvements. First, how can inclusive finance better support the
consolidation of poverty alleviation achievements and effectively prevent the return to poverty? In
some areas, achievements of poverty alleviation are not solid enough; industries and sustainable
development have a weak basis; the income of people lifted out of poverty is unstable; and
financial services are not effective, targeted or precise enough. The financial sector needs to play
a bigger role in facilitating industrial development and fostering more forerunners in getting
welloff. Second, how can inclusive finance promote common prosperity through better integration
with the rural revitalization strategy? In 2020, the national per capita disposable income of urban
residents was RMB43,834, while that of rural residents was RMB17,131, indicating a significant
gap between urban and rural areas. The key to implementing the rural revitalization strategy lies
in securing "thriving businesses, pleasant living environments, social etiquette and civility,
effective governance and prosperity," which puts forward higher requirements for the depth and
breadth of financial services. Third, how can inclusive finance help more people from low-income
groups join the middle-income groups? According to the National Bureau of Statistics, in 2019,
the low- and lower-middle income groups in China, of which the households accounted for 40
percent of the total and amounted to a population of 610 million people, earned a monthly per
capita income of nearly RMB1,000. How to help low-income groups (including those in both
urban and rural areas) step into middle-income groups is the key to achieving common
prosperity and forming an olive-shaped social structure. The financial sector should focus on
better consolidating the achievements of mass entrepreneurship and innovation, continuously
supporting micro and small businesses (MSBs), and implementing employment-oriented policies
in achieving high-quality development, so as to promote the steady increase of people's income.
Fourth, how to ensure that the general public can more effectively benefit from the value and
convenience of financial services? At present, although basic financial services are available in
urban and rural areas across the country, the role of the financial sector needs to be more
integrated into people's life. For example, some elderly people are still facing a "digital divide",
finding it difficult to enjoy the convenience of digital finance; some people still lack the awareness
of investment and wealth management, and the role of finance in empowering the general public
to preserve and increase wealth needs to be enhanced; people's resilience to shocks of serious
diseases and other risks is not strong enough, and insurance has not built a strong safety net for
the people yet. The fifth point is how to make inclusive finance-related policies work more closely
with fiscal, industrial, and employment policies so as to effectively form a basic system for the
coordination of primary distribution, redistribution, and tertiary distribution.
3. Facilitating common prosperity with high-quality development of inclusive finance
As China embarks on a new journey to build a great modern socialist country in all respects,
common prosperity has been given new meanings. It is the requirement of the times for the
financial system to facilitate common prosperity with high-quality development of inclusive
finance. Here are some key points to consider:
(1) Narrowing the income gap and pooling financial wisdom to improve financial services for
MSBs. MSBs are major job creators and the main channel to stably increase the income of
urban and rural residents. We should give better play to the role of "synergy of multiple policies"
for encouraging inclusive financial services to support MSBs. We should build a long-term
mechanism of "lending with confidence, willingness, ability and professionalism" and support
innovation, entrepreneurship and sustainable development of micro and small market entities
such as MSBs and self-employed businesses. Through this and the jobs that are provided by
them, primary distribution will be enhanced and the income gap will be narrowed. We also need
to give full play to the decisive role of the market in allocating resources and broaden the
financing channels for MSBs through the financial market. We must give better play to the role of
the government, always adhere to the principle of "unswervingly consolidating and developing the
public sector, and unswervingly encouraging, supporting and guiding the development of the
nonpublic sector," support the development of the private economy, strengthen the resilience of the
supply chain, and create a sound environment for the orderly and effective development of
MSBs.
(2) Narrowing the gap between urban and rural areas and contributing to the rural revitalization
strategy. Rural revitalization is a major strategy for narrowing the gap between urban and rural
areas and building a great modern socialist country. We should give full play to the role of
inclusive finance in consolidating and expanding the achievements of poverty alleviation and
connecting them further with rural revitalization, continuously optimize the system of rural
financial services, and promote more balanced urban and rural financial services. We must
concentrate on securing "thriving businesses", continue to innovate financial products and
services, put rural assets to use, and increase farmers' property income, thus consolidating the
economic foundation for rural revitalization. We must faithfully implement Xi Jinping's Thought on
Ecological Civilization and realize the integrated development of inclusive finance and green
finance, to make inclusive finance greener, and green finance more inclusive.
(3) Narrowing the regional gap and continuously exploring financial solutions to promote common
prosperity through the inclusive finance reform pilot zones. We should give play to the positive
role of inclusive finance in effectively advancing key regional strategies and coordinated regional
development strategies, and push forward the construction of pilot zones for inclusive finance
reforms in accordance with local conditions and through targeted policies, and bring about
greater progress in wider areas. In particular, it is necessary to explore reform and development
paths for inclusive finance in underdeveloped regions. We should not only highlight the
"vanguard" role of developed areas like Zhejiang Province, but also factor in the actual conditions
and needs of underdeveloped areas to fully motivate them to actively and systemically draw upon
the experience and practices of pilot zones. In this process, we must underline the role of locally
incorporated banks, which, adhering to the principle of "serving locals, MSBs, agriculture, rural
areas, and rural residents," should cultivate the local market with passion and affection to
promote a generally even distribution of financial resources across the local region.
(4) Improving people's livelihood and welfare and expanding the channels for offering financial
services to key areas and key groups. The people's livelihood is a key part of promoting common
prosperity as well as a key target of inclusive finance. We should accelerate improving financial
services for the elderly, the physically challenged, migrant workers, and college students;
effectively support key welfare programs such as pensions, education, medical care and
employment; promote entrepreneurship to increase income; guide a reasonable consumption
smoothing; and explore providing financial support for tertiary distribution through services such
as payment, settlement and charitable trust. We must also establish the concept of responsible
finance, provide financial consumers with products and services that match their risk tolerance,
adjust the threshold for financial products with lower risks, and enhance the inclusiveness of
financial services, so as to create conditions for effectively increasing residents' property
income.
(5) Promoting intellectual prosperity and continuously enriching its content by cultivating a good
financial culture and improving the financial literacy of the whole population. Financial culture
emphasizes honesty and trustworthiness, spirit of contract, rational investment and a risk-based
approach. It not only promotes material wealth, but also constitutes an organic part of intellectual
prosperity. We must cultivate a positive and upright financial culture and strengthen the spirit of
contract and integrity of each citizen. We should enhance the residents' and households'
awareness of financial health. Based on the wide coverage of inclusive finance at present, we
should push forward the building of financial health to optimize the financial status of residents
and households, and stimulate their motivation and potentials for innovation and
entrepreneurship, thus laying a more solid foundation among the public for common prosperity.
We should strengthen the top-level design of financial education, systematically integrate
financial knowledge into the national education system, and coordinate and provide integrated
financial literacy activities to help the people "keep their money."
Dear colleagues and friends, as the Chinese poem goes, "Someday, with my sail piercing the
clouds; I will mount the wind, break the waves, and traverse the vast, rolling sea." In the new era
and in our new journey, the financial sector bears the responsibility to promote the prosperity of
the people, the prosperity of the country, and the beauty of China through high-quality inclusive
finance, and effectively promote the common prosperity of all people. Zhejiang Province is taking
the lead in building a demonstration zone for common prosperity, for which the financial sector
will focus on inclusive finance to provide full assistance. It is our hope to work with local
governments to explore a successful path to common prosperity and contribute to building a
great modern socialist country.
Finally, I wish this forum a complete success.
Thank you.