Jin Wei

Director, Institute of Culture and Tourism Finance, Beijing Liyan Institute of Finance and Development

Deputy Director, Cultural Finance Research Center, National Institution for Finance & Development

Senior Research Fellow of INERI

During the "Thirteenth Five-Year Plan" period, the development of my country's cultural finance has been in a stage of balance and rebalance after a short peak period, and some areas are in urgent need to release innovative vitality. But this year, with the global new crown pneumonia epidemic, the development trend of cultural finance has added more variables. 2020 is becoming a key historical crossroads. Based on this, Jin Wei, Senior Research Fellow of INERI, put forward several suggestions on how to develop cultural finance under the background of "double cycle".

1. Opportunities and challenges coexist in the new situation

Before we understand the relationship between the "dual cycle" and the development of cultural finance, we must first have an overall grasp of the current new situation. The so-called new situation is mainly due to the many economic and social changes that have occurred since the new crown pneumonia epidemic this year, as well as some original environmental factors, such as increasing international trade disputes. Under the new situation, the development of cultural industry and cultural finance is undoubtedly facing huge challenges. However, it is also necessary to realize that the environment constituted by my country's established strategy has not changed significantly, and even under the new situation, this strategic environment will be more optimized, so there is still a huge development for the cultural industry and cultural finance. opportunity.

First look at the challenge. One challenge is the fatal impact of the epidemic on the cultural industry or cultural tourism industry. Under the pandemic, the government has issued many policies. The current resumption of work and production has achieved great results, but some of the damage that has been done is irreversible. There are many small and micro enterprises in this industry, and the stickiness of personnel is poor. Once disbanded or bankrupt, it is difficult to restore to the original state, which is very detrimental to cultural finance. The other challenge is broader. It is a problem that all industries are facing, that is, the increasing uncertainty of the international situation. Local conflicts in the political and economic spheres are becoming more and more intense, and the possibility of military conflicts is increasing. If there are major changes in this external environment, the impact on industrial development can be imagined.

However, for the country, for the central government, the situation should be generally controllable. In addition to the uncertainty, there is a certainty: the mission of the great rejuvenation of the Chinese nation will not be abandoned. Persist in reform and opening up and adhere to the correct direction of the socialist market economy will not change. We must trust the central strategic determination. At present, the central government has proposed the strategy of promoting a new development pattern of "dual cycles", which is to adhere to the principle of self-centeredness and adopt a positive attitude to respond to the tremendous changes in the global situation. This is the background for us to develop the cultural industry more actively. The background remains unchanged, and the development of the cultural industry still has a good future.

 A more direct positive background is that the central government attaches great importance to cultural construction and cultural industries. If there is a cultural industry, there is a cultural finance. On 17 September 2020, General Secretary Xi pointed out during an investigation and investigation in Changsha, Hunan: "Planning for the development of the '14th Five-Year Plan' period requires great attention to the development of cultural industries." On 23 September 2020, in a speech at a forum of representatives of experts in the field of education, culture, health and sports, it was pointed out that General Secretary Xi also emphasized that during the "14th Five-Year Plan" period, we must put cultural construction in a prominent position in the overall work. It is necessary to "prosperously develop cultural undertakings and cultural industries, continuously improve the country's cultural soft power, increase the influence of Chinese culture, and give play to the role of culture in leading fashion, educating the people, serving society, and promoting development." This has injected a strong spiritual power into the cultural industry and boosted the confidence in the high-quality development of the cultural industry.

2. "Let’s take the domestic cycle as the main body" is not an old road closed

If this year's five major economic keywords are selected, "Double Cycle" will definitely be selected. On 14 May 2020, the Politburo Standing Committee meeting pointed out that it is necessary to deepen supply-side structural reforms, give full play to my country's super-large market advantages and domestic demand potential, and build a new development pattern in which the domestic and international dual cycles promote each other. On 23 May 2020, General Secretary Xi Jinping pointed out again when he visited the CPPCC members at the Third Session of the 13th CPPCC Economic Committee Meeting: Facing the future, we must regard meeting domestic demand as the starting point and goal of development, and accelerate the construction of a complete China’s domestic demand system has gradually formed a new development pattern with the domestic big cycle as the main body and the domestic and international double cycles promoting each other, and fostering new advantages for my country to participate in international cooperation and competition under the new situation.

The proposal of this strategy has become an important basis for guiding my country's current economic development, and all sectors of society are actively learning and understanding the spirit and meaning of this strategy. As mentioned earlier, the "dual cycle" is also a major background that must be paid attention to in the current development of cultural industries. This is in the economic category and has the closest and most direct relationship with cultural industries and cultural finance. The "double cycle" was proposed in the context of the outbreak of the new crown pneumonia, but it cannot be simply considered that the "double cycle" is just to respond to the epidemic. If you understand the "double cycle" from an economic perspective, you will find that in fact, for any economy that is not completely closed to the country, the double cycle has always been there. It's just that for our country, under the new situation, the connotation of domestic and international cycles will change, and we need a new and higher-quality "dual cycle."

First, we must correctly understand the "inner loop". Since the reform and opening up, the "participation in the international cycle" characterized by "two ends outside" has played its due role. In the past 40 years, my country has become the world's second largest economy, and the original cycle model is obviously not suitable for development. need. We have reached the stage where we need to take the domestic cycle as the mainstay. We must take meeting domestic demand as the starting point and goal of development, and accelerate the construction of a complete domestic demand system. The new crown pneumonia epidemic and the resulting changes in international economic trends have prompted us to speed up the re-examination of the connotation and importance of the internal circulation, and it is only a catalyst for the introduction of the new development pattern of "double circulation". We must pay attention to the relationship between cultural consumption and the domestic cycle. Now relevant departments realize that there is still a lot of room for growth in cultural consumption, and strive to make it an important part of the domestic demand puzzle. But we also need to see that the boost to cultural consumption is not a question of stimulus policies in the long run. If residents do not have enough sense of security about future health, education, housing and other issues, most of the wealth growth will not be transformed into cultural consumption.

The second is to pay special attention to "cultivating new advantages for participating in international cooperation and competition." The dual cycle with the "domestic cycle as the main body" does not mean to abandon the external cycle, let alone the old path of shutting down the country. Some people focus on the inner circulation and abandon the outer circulation. It is easy to conduct layer by layer and eventually form a closed economic structure. The domestic and international double cycles must promote each other. The domestic big cycle is the starting point and end of development, but in the end, it is necessary to actively participate in international cooperation and competition. We can look at it this way. The current tense international political and economic trends and the relatively closed environment forced to form by the new crown pneumonia epidemic is no different from an opportunity. We can calm down and practice our internal skills, but we need to always put our internal skills to "better cultivate our country's new advantages in international cooperation and competition".

3. What aspects should be emphasized in the development of cultural finance under the background of "dual cycle"

The development of cultural finance has its own regularity, but under the new development pattern of "dual cycle", the development of cultural finance must adapt to the current situation, focus on and act actively. To develop cultural finance, it is necessary to use institutional supply to create an environment and expand capital supply, improve internal strength, actively participate in reform and opening up, and form my country's new advantages in participating in cultural international cooperation and industrial competition.

First, strengthen institutional supply, increase policy efforts, and promote cultural financial service reform and capital market supply. During the "Thirteenth Five-Year Plan" period, my country's cultural financial policy has taken the embryonic form of systematization, and cultural financial services have achieved preliminary specialization. The "Law on the Promotion of Cultural Industries" will be formally implemented. The content related to cultural finance basically reflects my country's major achievements in the field of cultural finance policies over the years, which will also set the tone for cultural finance policies during the 14th Five-Year Plan in the future. During the 14th Five-Year Plan period, the development of cultural finance requires further enrichment of the cultural finance policy system. The "dual cycle" should probably create a more relaxed policy environment for the cultural finance field, with equal emphasis on top-level design and actual policy performance, intensive cultivation, and promotion of the product exclusiveization, institutional exclusiveization, market specialization and personnel specialization of my country's cultural financial service system . In the context of the asset market reform policy, it is necessary to make full use of the opportunity of my country’s capital market opening "transition from pipeline and single-point opening to institutional and systematic opening", vigorously encourage cultural industries to use capital markets, and promote the return of cultural industry equity financing Normal horizontal line.

Second, taking the "new infrastructure" as an opportunity, cultural finance should use the application of financial technology to promote the scene-based revolution and improve its own systemic services and the ability to prevent and control risks. Since January 2020, the central bank has released a list of several batches of financial technology regulatory innovation pilots (Chinese-style regulatory sandboxes), first in Beijing, then in Shanghai, Chongqing, Shenzhen, Hebei Xiong’an New District, Hangzhou, Suzhou, etc. Six cities (districts) have expanded the supervision of financial technology innovation pilot projects. Judging from the released pilot projects, the number of technology types such as big data, artificial intelligence, Blockchain, biometrics, and cloud computing are at the forefront. We need to pay special attention to the application of financial technology in the field of cultural finance. In this field, there were some scenes five years ago, but it is difficult to implement the application, mainly because the market is small and difficult to promote. These scene-oriented things will be further clarified in the future. Some new fields may be more technologically applied, such as cultural enterprise supply chain finance, cultural consumer finance, etc. In terms of the cultural financial system, financial technology has not only innovated products, but is also building a new cultural financial infrastructure. For example, through financial technology, the original cultural enterprise credit management system and cultural asset evaluation system can be improved, and risk prevention and control capabilities can be improved. This is more important than product innovation. This field requires special attention to cultural data asset evaluation and management system issues.

Third, with the domestic cycle as the main body, cultural finance should enhance the ability of services to stimulate domestic demand and cultural consumption. We have been saying that with the growth of total GDP and the growth of wealth, the growth of cultural consumption is also inevitable, but there are always different algorithms for how much room for growth is. The so-called internal circulation is the main thing in the cultural industry to meet cultural domestic demand and stimulate cultural consumption. This is effective in the short term and can support economic growth. my country's cultural consumption has always been a shortcoming of the cultural industry cycle that needs to be made up. Since 2016, relevant departments have begun to promote the construction of "National Cultural Consumption Pilot Cities". In the "Opinions of the General Office of the State Council on Further Stimulating the Potential of Cultural and Tourism Consumption" issued in August 2019, it is proposed to introduce a batch of "national cultural and tourism consumption potentials". "Tourism consumption pilot cities" and "national cultural and tourism consumption demonstration cities", this work will soon be implemented. Under the new "double cycle" background, cultural finance must be combined with this work. To develop cultural finance, we need to focus on some cultural consumption platforms, and vigorously develop consumer finance around consumption patterns such as information consumption, entertainment and leisure consumption, art consumption, tourism and sightseeing consumption. In the future, there will be a larger market for comprehensive consumer credit based on the consumption of 3C digital products. This can be used as a type of cultural consumer finance, but it is mainly necessary to directly carry out financial innovations for consumption scenarios, such as financial innovation based on artwork consumption.

Fourth, with the goal of adjusting structure and promoting development, cultural finance should enhance its ability to serve regional economic development. In the past, cultural finance was relatively marginalized and had little to do with overall economic development. But at present, regardless of the importance of cultural industry or finance, the development of cultural finance must be further integrated into the blueprint of regional and urban economic development, rather than entertaining oneself in isolation. Relevant departments are promoting the creation of the "National Cultural and Financial Cooperation Demonstration Zone". One aspect of this demonstration zone reflects the changing role of cultural finance in the regional economy. It is a feasible route to further strengthen the service function of cultural finance on the basis of the demonstration zone, and incorporate cultural finance into the pilot work of regional financial reform at the national level, so as to promote the integration of cultural finance to develop demonstration cities. At the same time, the development of regional cultural finance must further integrate national strategies, play a role in the cultural industry to promote new urbanization and rural revitalization strategies, and play a role in the cultural industry to promote regional coordinated development strategies.

Fifth, combining the reform and opening up strategy and the "One Belt One Road" vision, cultural finance should enhance the ability to serve international cooperation in the cultural industry and cultural trade, and form new advantages for my country to participate in cultural international cooperation and industrial competition. Under the epidemic, the cooperation model of Chinese and foreign cultural industries in industries such as film and television, creative design services, artworks, conventions and exhibitions, and cultural tourism have all changed. The original joint creation, production, development, marketing, etc. are either suspended or transferred to a digital platform. The cultural industry chain with international cooperation as the main line is facing unprecedented reconstruction. Faced with this situation, financial institutions should continue to support cultural enterprises and provide new solutions for new cooperation models. In terms of cultural trade finance, the trend of digitization of trade methods such as cross-border cultural e-commerce is accelerating. The trade financing, credit guarantee, financial management and other services that are usually provided around the cultural trade chain also need to be changed in the new situation. Trade provides more convenience.

What needs attention is how to use cultural finance under the framework of the free trade zone. In this field, there are not only the issue of how to support the trade of general cultural products, but also the issue of supporting the trade of art. Since the establishment of the Shanghai Pilot Free Trade Zone in 2013, my country currently has 21 free trade zones, among which free trade zones such as Shanghai, Guangdong, Chongqing and Henan have set up bonded warehouses for artworks. Art finance is an important part of cultural finance. It should actively use the advantages of the free trade zone policy and actively use financial means to serve art transactions. At the same time, it must be combined with fiscal and taxation policies to promote the adjustment of related tariff systems and reform the management and service models of art transactions. Under the current world economic situation, if we can make good use of this window period, we can turn crises into opportunities, actively innovate and practice boldly. There should be a real world art trading center in the mainland.

This article is based on Jin Wei's speech and PPT text at the 2nd Kaifeng International Cultural Finance and Trade Forum held on 22 October 2020.

Source: WeChat Official Accounts "Shenzhen Cultural Property Exchange"