ZHU Min: The financial industry should be vertically integrated to support technology innovation
June 15,2021

  ZHU Min, chairman of the National Institute of Financial Research of Tsinghua University, said at the 13th Lujiazui Forum on June 11 that in order to serve technology and the real economy, the financial sector must carry out profound reforms, achieve a vertical integration, further deepen and refine the market, and establish a complete market system and a regulatory system.

  ZHU noted,“The traditional understanding of the financial industry is horizontal, with the banks, the bond market, the stock market and venture capital eachdoing apart of business. Faced with such a large-scale investment and financing, we need to poolall the financial resources togetherand make them interconnected, so that bank funds can be channeledto the bond market, the capital market and other areas through wealth managementproducts and other forms.”

  At present, the real economy is still undergoing a series of profound and fundamental structural changes, which poses also a huge challenge to the financial sector. As ZHU pointed out, China’s economy is moving towards a service economy.The part of the manufacturing sector in GDP started to declineafter reaching its peak in 2012, and the service sector now accountsfor 54% of GDP. For the next ten years, the proportion of servicesin the national GDP will continue to grow by 0.3-0.4 percentage points each year, to reach 60% ten years later. The financial sectoris actually not used tolending to the service sector, especially when it comes to small and medium-sized technology enterprises in services.