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Group photo of the main guests of the forum (from the fourth left: Meng Yu, Chairman of the Hong Kong Chinese Finance Association; Xu Zhengyu, Secretary for Financial Services and the Treasury of Hong Kong; Mao Zhenhua, founder of China Credit Trust Group and chief economist of China Credit International; Cai Hongbin, Dean of the Faculty of Business and Economics of the University of Hong Kong; Chen Zhiwu, Director of the Hong Kong Institute of Humanities and Social Sciences of the University of Hong Kong; Ba Shusong, Chief Economist of the China Banking Association and Adjunct Professor of the Faculty of Business and Economics of the University of Hong Kong)   On the afternoon of July 18, 2024, the "Hong Kong Green and Sustainable Finance Development Forum and the Press Conference on the Recognition of QDI and GSF Qualifications of CCXAP by the Hong Kong Monetary Authority" jointly sponsored by China Chengxin (Asia Pacific) Credit Rating Co., Ltd. (hereinafter referred to as "CCXAP"), CCXGF International Co., Ltd. (hereinafter referred to as "CCXGF International"), and the Hong Kong Chinese Finance Association was successfully held. Mao Zhenhua, founder of China Chengxin Group and chief economist of China Chengxin International, delivered a speech. In his speech, Mao Zhenhua mentioned that green finance, as an important engine to promote economic transformation, has developed rapidly in Hong Kong. He shared the development achievements and future goals of China Chengxin (Asia Pacific) and CCXGF in Hong Kong, pointed out that China Chengxin Group will continue to work closely with all parties to empower the development of the Hong Kong bond market, and expressed confidence in jointly promoting the continued prosperity of the Hong Kong bond market and green finance.   Mao Zhenhua, Founder and Chairman of China Chengxin Group, Professor of Economics, Faculty of Business and Economics, University of Hong Kong     The following is the transcript of the speech:   Dear guests, good afternoon! On behalf of the organizer, I am honored to express my warm welcome and sincere gratitude to all of you for your presence and support.   As an international financial center, Hong Kong's bond market has always played a pivotal role. As of early July, 176 bonds with a value of nearly US$50 billion have been listed on the Hong Kong Stock Exchange this year, of which more than 70% are from issuers in the mainland. In recent years, with the increasing attention paid to sustainable development around the world, green finance, as an important engine to promote economic transformation, has also developed rapidly in Hong Kong. As local rating service agencies, CCXAP and CCXGF are important participants in the market and are fully aware of their responsibilities and missions in this process. I am proud to share that as the largest Chinese-owned rating agency in Hong Kong, we have made significant progress in supporting the development of Hong Kong’s bond market and green finance. CCXAP (Asia Pacific) obtained the license in 2012 and has been deeply involved in the market for more than ten years. Its business has made great progress in recent years. According to the latest statistics, CCXAP has ranked third in the number of rated customers served in Hong Kong and among local institutions in China. ranked first in. What encourages us is that last month, our company received QDI and GSF qualification recognition from the Hong Kong Monetary Authority, becoming the first Chinese-funded credit rating agency to be recognized. Through rigorous rating standards and in-depth industry insights, we will continue to be committed to providing high-quality credit rating services, building a communication bridge between investors and issuers, and ensuring market transparency and stability.   As the bond market and Chinese credit rating agencies develop, the green finance industry is also booming in Hong Kong. Green finance is not only a way of investment, but also one of the important ways for us to cope with global environmental challenges. In order to better provide customers with more professional services, CCXGF Service Company opened in 2023. CCXGF has been actively involved in promoting the transformation of the economy to a more environmentally friendly and sustainable direction by promoting the issuance of green bonds and sustainable development bonds. In the future, CCX Asia Pacific and CCX Green Finance will continue to work closely with all parties in the Hong Kong financial market to support more innovative financial products and services and empower the development of the Hong Kong bond market. We firmly believe that through cooperation and innovation, Hong Kong will continue to play a leading role in the international green finance arena and become the preferred destination for global investors and issuers.   Finally, I sincerely hope that today’s discussion can bring us more inspiration and resonance, and jointly promote the continued prosperity of Hong Kong’s bond market and green finance. Thank you all for coming, thank you! The Hong Kong Green and Sustainable Finance Development Forum focused on the current development trend of global ESG information disclosure, sustainable development strategies of listed companies, the development prospects of Hong Kong's green and sustainable finance, and the internationalization prospects of Chinese rating agencies, and conducted in-depth discussions. Hong Kong Financial Services and Treasury Bureau Director Xu Zhengyu, Hong Kong Chinese Finance Association Chairman Meng Yu, Hong Kong University of Business and Economics Dean Cai Hongbin, Hong Kong University of Hong Kong Institute of Humanities and Social Sciences Director Chen Zhiwu and other important political and academic representatives in Hong Kong attended the forum and spoke. At the forum, Mao Zhenhua, founder of China Chengxin Group and chief economist of China Chengxin International, presented the CCXGF ESG rating results to two industry leading companies, China Power International Development Co., Ltd. and China Construction International Group Co., Ltd.   He Xi, Chairman of the Board of Directors of China Power International Development Co., Ltd. and Chairman of China Power International Development Co., Ltd., accepted the "AA" ESG rating from CCXGF on behalf of the company.   Zhou Zhike, Investor Relations Director of China State Construction International Group Co., Ltd., accepted the "AA" ESG rating from CCXGF on behalf of the company.   Paul Hui, Secretary for Financial Services and the Treasury, Hong Kong   Meng Yu, Chairman of the Hong Kong Chinese Finance Association   Hongbin Cai, Dean of the School of Business and Economics, University of Hong Kong   Chen Zhiwu, Director of the Hong Kong Institute of Humanities and Social Sciences, University of Hong Kong   China Chengxin Group was founded in October 1992. Its predecessor was China Chengxin Securities Rating Co., Ltd., which was established with the approval of the People's Bank of China. It is China's first national non-bank financial institution engaged in credit rating, financial securities consulting and information services. The group has credit industry sectors such as credit rating, credit investigation and credit management consulting. It is one of the largest comprehensive credit industry groups in China with the most complete industrial chain, the richest credit products and the largest scale. There are more than 1,300 employees, more than half of whom have a master's degree or above. While insisting on expanding and strengthening the credit industry, the group actively responds to the national strategies of "Healthy China" and "Dual Carbon Action", actively explores and promotes third-party credit and information service businesses in the fields of big health and dual carbon technology , and enters the fast lane of innovative business layout. In addition, the group has increased its investment in specialized investment areas and participated in a number of equity investment projects at home and abroad. The investment areas cover finance, real estate, skiing and other industry projects, and have achieved fruitful results.

  From August 25 to 26, the 2023 Summer Summit of the Yabuli Forum was held in Shenzhen. Mao Zhenhua, Professor of Economics at the School of Business and Economics of the University of Hong Kong, Director of the Yabuli China Entrepreneurs Forum, and Founder of China Credit Trust Group, delivered an opening speech, talking about the importance of Hong Kong to China and the future development of the Guangdong-Hong Kong-Macao Greater Bay Area.   Mao Zhenhua said that Hong Kong was once a pearl of China and made special contributions during the colonial period, during China's reform and opening-up process, and during China's transformation. At this critical historical juncture of the great changes that have not been seen in a century, against the backdrop of the Sino-US game, the rise of anti-globalization, and the cyclical adjustment of China's economy, Hong Kong can still play an important role.   This article is the author’s speech at the Yabuli Summer Summit (Shenzhen) on August 25, 2023. The following is the full text of the speech:   It is a great honor for me to speak at this conference. I would like to share with you some of my research and understanding of Hong Kong and its economy since I was hired by the University of Hong Kong last year.   As we all know, Hong Kong's economic and social development is facing some difficulties at present, but Hong Kong once had a period of smooth sailing. At that time, there was a saying that Hong Kong was a city that "had good luck with both sides", that is, when the Western economy was good, Hong Kong was also good, and when the Chinese economy was good, Hong Kong was also good. Even if one side's economy was not good, Hong Kong's development was still supported. But now Hong Kong has gone from "having good luck with both sides" to "hitting the wall on both sides". No matter which side has problems, Hong Kong will be affected. What has Hong Kong experienced? What difficulties are it facing now? What will the future look like? Especially as the core city of the Greater Bay Area, what kind of fit will be formed between the twin cities of Shenzhen and Hong Kong in the future? I think this is a question that everyone is very concerned about.   Hong Kong has experienced multiple shocks in the past four years. In simple terms, it has encountered "two black swans" and "two gray rhinos". One of the black swans was the "anti-extradition bill amendment" incident in 2019. This unrest had a great impact on Hong Kong society. With the introduction of the National Security Law, Hong Kong has begun a journey from chaos to governance, but it will take some time for the social trauma to heal. Another black swan event is the COVID-19 pandemic, which has caused a huge impact on the world. Hong Kong's experience in dealing with the pandemic is very special. Due to its special system and mechanism, Hong Kong must not only open up to overseas connections, but also coordinate exchanges with the mainland. It must make a very difficult balance between the two epidemic prevention and control models of China and the West, and it has also paid a huge cost. Although the impact of the current epidemic is gradually weakening, its impact on the industrial chain, the impact on people's lives, and the impact on Hong Kong's international relations still exist, and recovery will take some time.   In addition to the two black swans mentioned above, there are two gray rhinos. The so-called "gray rhino" is usually used to refer to risks that are known to exist but whose outbreak is unknown. Such risks generally have early signs, but have not been fully taken seriously. They may suddenly emerge in the thick fog, under deep water, or after a triggering event. One of the gray rhinos is the great changes that have not been seen in a century, the game between the two major powers of China and the United States. This gray rhino has intensified since 2018. The second gray rhino is the cyclical adjustment of the Chinese economy. An economy that has been developing rapidly for a long time always has a moment of adjustment, and we are now experiencing such a moment. Under the impact of the two black swans and the two gray rhinos, Hong Kong is currently facing special difficulties, which has hurt its vitality, reduced its popularity, and damaged its spirit. So, what will Hong Kong look like in the future?   Hong Kong was once a pearl of China. It made special contributions during the colonial period, during China's reform and opening up, and during China's transformation. The Xinhai Revolution was planned, organized, and funded in Hong Kong. Sun Yat-sen was the first graduate of the University of Hong Kong. Hong Kong also played a very important role in the early days of the War of Resistance against Japan. After the founding of the People's Republic of China, many talents from home and abroad returned to Hong Kong to serve the motherland. During the Korean War, imperialist countries imposed a blockade on my country, and Hong Kong played a very important role as a bridge. Since the reform and opening up, Hong Kong has assumed unprecedented historical responsibilities. To a certain extent, it can be said that Shenzhen's success today is due to its proximity to Hong Kong. At the critical historical juncture of the great changes that have not been seen in a century, against the backdrop of Sino-US competition, the rise of anti-globalization, and cyclical adjustments in China's economy, will Hong Kong continue to play an important role as always? This is an important question that we need to think about and answer seriously.     My preliminary analysis shows that Hong Kong is OK! Hong Kong can always play a special role in China's special period, and the same will be true in the future. From about 1945 to 1952, the population of Hong Kong increased from 600,000 in 1945 to 2.8 million in 1952. During this period, Hong Kong's population increased by about 300,000 people each year. The 300,000 new people each year were actually an important foundation for Hong Kong to become one of the four little dragons. These influxes of population not only brought labor, but also construction capital. With China's reform and opening up, Hong Kong's industry moved north, and Hong Kong encountered new development opportunities. Relying on the rapid development of China's economy and the financing of Chinese companies, Hong Kong gradually grew into a world financial center, and in fact, it is also a window for global investment in China. Under such a special opportunity, Hong Kong ushered in rapid development, but it also caused the deformity of its own industrial structure, which was heavily dependent on the financial and trade logistics industries, and the industrial structure was relatively single.   Whether it is the "decoupling" strategy proposed by the United States in the past or the "de-risking" strategy proposed now, it does not change the tone of the Sino-US game. Now the West has completely classified Hong Kong and the mainland into one standard, and the basic conditions for Hong Kong to assume the status of an international financial center are changing. Under the framework of "bottom line thinking + extreme thinking", will Hong Kong still be an international financial center in the future? Apart from the international financial center, what else will Hong Kong be? Clearing away the fog and looking at the essence, I believe that Hong Kong is still a very valuable Hong Kong, or even a more valuable Hong Kong. Its value comes from Hong Kong's "one country, two systems" and from the responsibilities and opportunities given to Hong Kong by the development of the country in a special period. What the motherland needs, Hong Kong does!   Under the extreme thinking, global Chinese capital is not safe in the West, and Chinese scientists and high-end talents are also not safe in the West. They hope to return to China to conduct scientific research and achieve their careers. So where is a better place for them to display their talents and play a role? Considering its long-term working and living methods, Hong Kong is an important option. But does Hong Kong have the conditions to absorb so many scientists? Not now, but I believe Hong Kong can do it in the future, because it has the strong backing of the motherland, the superior location close to Shenzhen, and the structural needs of the Greater Bay Area. This is the potential and source of power for Hong Kong. The current population of Hong Kong is about 7.33 million, and the population of Shenzhen is 17.66 million. Hong Kong accounts for about 41.5% of Shenzhen's population; however, Hong Kong's land is 1,113.76 square kilometers, while Shenzhen's is 1,997.47 square kilometers. Hong Kong accounts for 55.75% of Shenzhen's land, which means that Shenzhen's population density is higher than that of Hong Kong. If the ocean area is added, Hong Kong accounts for about 87.65% of Shenzhen's land area, but the population is only 41.5%. The planned area of Hong Kong's northern metropolitan area has reached 300 square kilometers, while the Shenzhen Special Economic Zone line is only 320 square kilometers. In comparison, Hong Kong still has great potential and space for layout in the future. Another example is in the capital field. Even after such a large industrial adjustment and external shocks, the losses suffered by Hong Kong's local banking system and consortiums are still relatively small, which shows that Hong Kong is very stable.     What role can Hong Kong, which is resilient and has great potential, play under the "one country, two systems" policy? What advantages can Hong Kong still tap? I think Hong Kong has the ability to play an important role in the two fields of education and technology.   First of all, in the field of education. Among the top 100 universities in the QS rankings in 2023, Hong Kong has 5 universities with strong scientific research capabilities. Of course, Hong Kong universities also have many shortcomings, and the QS ranking of the University of Hong Kong is not as good as that of the National University of Singapore, but I don’t think this is important. What is important is that in the context of "decoupling", we need international talents and need to cultivate talents in an all-English context, which can be achieved in the Hong Kong education system under the "one country, two systems". I have taught in universities in both the Mainland and Hong Kong. From a personal perspective, I think the two systems are very different, and we need an education system like Hong Kong. The number of college students in Hong Kong is only about 300,000, accounting for about 4% of its population, while the number of college students in Wuhan and Guangzhou accounts for more than 8% of the permanent population. If only the urban population of Guangzhou and Wuhan (both about 7 million) is considered, then this proportion will increase further. Compared with Guangzhou, Wuhan and other educational centers, the proportion of students in Hong Kong is relatively low, and university teachers in Hong Kong have to retire at the age of 60. If we increase the proportion of students in school, we can attract more international talents, including more professors, associate professors, assistant professors, and scientists to work in Hong Kong. This is a win-win situation. China needs more such high-end talents, and Hong Kong can also absorb more scientists. In addition, education is an industry in Hong Kong. The current training cost of each master's student is about 350,000 to 400,000 Hong Kong dollars. The current ratio of applicants to admissions is about 10:1. Judging from the application ratio of global universities, Hong Kong's admission rate is also low, and there are more students who hope to study in Hong Kong. If universities expand the enrollment of 300,000 graduate students, the annual tuition fees can exceed 100 billion Hong Kong dollars, plus the consumption of food, clothing, housing and transportation, it is a considerable market. It can be said that the development potential of Hong Kong's education industry in the future is still very large.   Another is the technology industry. Hong Kong is not a technology city, nor an industrial city. But Hong Kong has the conditions to develop the technology industry. Like Shenzhen, Hong Kong has the advantage of being backed by the super-large market of the motherland, and the mainland also has a strong manufacturing base. On this basis, Hong Kong has the conditions to attract large technology companies, and more importantly, to attract Chinese scientists from all over the world. Hong Kong has low taxes, clear property rights, and it is easier for companies to go public. In addition, with a familiar language environment, network environment, education environment, and a relatively convenient international exchange environment, Hong Kong is very attractive to high-end talents who come to work and settle in Hong Kong.   Will the development of science and technology industries in Hong Kong weaken Shenzhen? I don't think so. In the process of promoting the development of the Greater Bay Area, we must see that Hong Kong and Shenzhen have their own advantages. There should be a natural division of labor, a scientific layout, and healthy competition. If Hong Kong has more cutting-edge international scientific and technological research and development, Shenzhen will have better and further in-depth development and application, and will also be directly connected to the vast domestic market. The two cities will be a complete win-win. I don't quite agree that if some of the R&D centers of Huawei, BYD, and Tencent in Shenzhen go to Hong Kong, it will affect Shenzhen. I think we should do our best to go to Shenzhen (what should be in Shenzhen should be in Shenzhen), and what should be in Hong Kong should be in Hong Kong (what should be in Hong Kong should be in Hong Kong), so as to form a healthy competition pattern.   Overall, I think the advantage of the Greater Bay Area is ultimately due to Hong Kong. The most important and fundamental advantage of Hong Kong is "one country, two systems". In this sense, the Greater Bay Area is a place where advantages are converted and recreated. I also believe that Hong Kong and the Greater Bay Area will definitely hand in a beautiful answer sheet in this historical test of great changes, and will definitely write a magnificent historical chapter of the rejuvenation of the Chinese nation in the new era.   --------------------------   Mao Zhenhua is the Chairman and Founder of China Chengxin Group, Chief Economist of China Chengxin International, Director of Yabuli China Entrepreneurs Forum, Professor of School of Business and Economics of the University of Hong Kong, Member of the Expert Group of the Chief Executive's Policy Unit of the Hong Kong Special Administrative Region Government, Co-Director and Professor of the Institute of Economics of Renmin University of China, Dean of Dong Furong Institute of Economic and Social Development of Wuhan University, and Co-Chairman of China Macroeconomic Forum (CMF).  

Job Responsibilities: Support marketing initiatives related to ESG practices and sustainable development. Assist with the translation and content updates for the Green Finance website, monitor public account releases, organize brand marketing materials, and provide support for event preparation. Collaborate with team members to execute marketing activities, develop content, and engage with stakeholders. Foster a positive brand image and attract stakeholders who prioritize sustainable and responsible business practices.   Job Requirements: Bachelor’s degree in finance, marketing, communications, sustainable development, or a related discipline. Strong interest in ESG, sustainable finance, and responsible business practices. Excellent written and verbal communication skills. Proficient in digital marketing tools and platforms (LinkedIn, Xiaohongshu, WeChat public accounts), including daily operational management, content design, image and video editing, and common marketing strategies. Strong organizational and project management skills, capable of managing multiple tasks and deadlines. Detail-oriented with a commitment to delivering high-quality work. Ability to collaborate effectively in a team environment and engage with diverse stakeholders. Familiarity with sustainable development reporting and ESG disclosure practices is preferred.

  Recently, the South China Morning Post (SCMP) in Hong Kong published an interview with Professor Mao Zhenhua in the "Open Issues" column with two full pages, recording Professor Mao Zhenhua's judgment and suggestions on the current Chinese and Hong Kong economy. Founded in 1903, the South China Morning Post is not only the best-selling newspaper in Hong Kong, but also one of the most credible and influential media in Asia. The following is a translation of the English interview.       ◎The following is translated from the original English text:   The era of big real estate developers is over Mao Zhenhua is the founder of China Chengxin Group and co-director of the Institute of Economics at Renmin University of China. A scholar and commentator on the Chinese economy, he has been a professor at the School of Business and Economics of the University of Hong Kong since 2022 and was one of the first to warn of potential pressures on Chinese property prices. In this episode of the "Open Questions" series of interviews, Mao Zhenhua analyzes China's struggling real estate industry, reflects on tensions between China and the United States, interprets the highly anticipated Third Plenum of the Communist Party of China, and explores Hong Kong's changing role in the broader economic evolution.   SCMP: China's real estate market is in crisis after a series of defaults by developer Evergrande in 2021. You noted the potential consequences of Evergrande's liquidity problems a decade ago. How do you now assess the impact of the real estate downturn on the Chinese economy?   Mao: Real estate has become one of the biggest issues affecting China's economic operation. China's real estate was once the focus of investment for the whole society. As real estate prices continued to rise, the unique concept of "only if you have a house can you have a home" has become more deeply rooted in people's minds.   Under such circumstances, owning or buying a house has become the "standard" for middle-class families, and even those families who do not have high income capacity are buying houses by leveraging. In a short period of time around 2017, housing prices were pushed to a new high, which was a sign that the bubble was about to burst.   I noticed that Evergrande started to promote sales by offering 20% discounts as early as 2016. It is generally believed that this is only a case of Evergrande, as the private developer faces liquidity problems due to heavy debts and lack of bank loan support.   However, I think this phenomenon is not an isolated case, but rather a universal phenomenon, which indicates a sales problem for the entire industry: housing prices have peaked and will begin to decline. I was also the first in China to raise the alarm that attention should be paid to the downward trend in Chinese real estate prices. I also called on our regulators to conduct more stress tests, including stress tests on the total debt-paying capacity of China's real estate industry and stress tests on the risk exposure that the financial system will face.   Given that the stress test at the time was not sufficient, I think Evergrande’s problems could have quickly spread to other real estate companies, and the policy was not adjusted until about a year later, when many real estate companies were truly on the verge of bankruptcy.   In 2021, I argued that China, like many other parts of the world, no longer needs so many large real estate companies. The oversupply in China's real estate industry will have two far-reaching effects: first, the real estate industry, as a "pillar industry", will not recover, but will gradually decline. For example, in European countries, especially those with slowing population growth, there are almost no large real estate developers in the market because there is already enough inventory; second, the downward trend in real estate prices may lead to other major economic problems, such as the contraction of the household sector's balance sheet.   SCMP: The Chinese government has taken a number of measures to stabilize the situation, including several strong measures announced on May 17. These measures include lowering the minimum mortgage rate and instructing local governments to buy unsold apartments and convert them into social housing. Do you think these responses are working?   Mao: The introduction of these policies has promoted the recovery of transaction volume, but has not completely reversed the trend of falling housing prices. Therefore, these measures have not achieved the expected results.   My suggestion is to limit supply, such as freezing new land supply and new real estate projects. These measures will send a clear signal of "limited supply" to the market, which will help stabilize housing prices. Otherwise, continuing to expand supply will only aggravate the problem rather than alleviate it. Of course, the projects that have already started construction are an exception, because home buyers have already paid the down payment, and the work of "guaranteeing delivery of the house" must be completed.   Real estate investment has declined in recent years, but the scale of real estate development investment and the newly built area of commercial housing are still large. They are much smaller than the peak periods in 2019 and 2020, but still higher than in 2015 and 2016.   As of the end of May this year, the area of commercial housing for sale in China exceeded 743 million square meters, an increase of 15.8% over the same period last year and an increase of 5 million square meters over 2016. I think there is still a long way to go for China's real estate industry to destock. The scale of land acquired by Chinese real estate developers is an astronomical figure. If all the land is used for real estate development as planned, the task of destocking the real estate market will be difficult to complete.   We must abandon the idea that "real estate must be the mainstay of the economy". It will take a long time to digest the current stock of housing. It can be said that the era of large real estate companies is over. Although we will still see some cities upgraded or renovated, the era of large-scale construction is over.   SCMP: How do you evaluate the impact of these phenomena on Chinese families? What do you think of the current level of consumer demand?   Mao: The debt problem of China's household sector is becoming increasingly prominent. In 2007, before the global financial crisis, the ratio of China's household sector debt to GDP, or the household leverage ratio, was about 18.9%. By the end of last year, the household leverage ratio had climbed to 69.3%.   The new debt of the household sector is mainly used to purchase real estate, but as real estate prices fall, the household debt situation has greatly worsened. A 30% or 40% drop in house prices means that home buyers have almost lost their down payment, which is a huge loss and pressure for the middle class. The shrinkage of real estate assets has also affected residents' consumption, thus placing a great constraint on the economy.   The value of real estate assets declines, but the liabilities are rigid, and the mortgage repayments will not decrease accordingly, which results in a deterioration of the balance sheet. The shrinkage of residents' wealth will trigger some psychological changes. For example, consumers will feel that they hold less money and have greater spending pressure, and will need more savings to cope with debt pressure. And when everyone is reducing consumption, insufficient consumption will bring significant constraints to economic operations.   Insufficient consumption is a long-term problem for the Chinese economy. During the period of rapid economic growth, economic growth was not mainly dependent on the domestic consumer market. Of course, domestic income growth also drove economic growth, but the main driving force for growth still came from globalization and international markets. Among the so-called "troika" of growth engines, namely exports, investment and consumption, exports have been the first driving force of China's economic growth for many years. However, with the outbreak of the global financial crisis in 2008, overseas demand shrank, and trade protectionism in many countries rose, and China turned its focus to domestic demand.   But we soon discovered that boosting domestic demand was difficult. Economists don't talk about desire, but rather demand with the ability to pay. When China's GDP grew at a rate of more than 8% or even 10%, residents' income did not keep up with the pace of economic growth. With the current slowdown in overall growth, residents' consumption capacity will be further constrained.   From 2000 to 2022, Chinese households’ final consumption accounted for only about 38% of GDP, lower than the world average of 57.6%. In contrast, the final consumption rate of American households is about 67.5%. The reason is that the proportion of Chinese residents’ income in the national income has been low for a long time. With the decline in asset prices and the contraction of household balance sheets, there have been some problems of consumption downgrade and sinking in economic operation.   SCMP: In order to reduce dependence on exports, the focus of economic transformation has shifted to domestic demand. How do you think China should promote this process?   Mao: It is both easy and difficult to answer this question. China has always had a tradition of attaching importance to savings and wealth accumulation and despising consumption. In recent years, China has made great progress in basic education and medical care, which has brought certain favorable conditions for increasing consumption. But the problem is that the current economic downturn has reduced people's income levels and income expectations. The income of public institution employees, including civil servants, teachers and hospital staff, has begun to decline, and many other industries have also seen layoffs. The reduction in job opportunities has put tremendous pressure on people's income expectations. More importantly, during the impact of the epidemic, many people were out of work for several months, and the income gap formed during this period has not yet been filled.   I have been calling for economic “stimulus” to be provided to those hit by the pandemic in the form of consumption subsidies or cash handouts since 2020, and have since gone further, suggesting that residents should be provided with RMB 10 trillion (US$ 1.4 trillion ) in cash subsidies.   On paper, this is a very large number, accounting for about 8% of GDP, and it also exceeds the red line of 3% of GDP as a fiscal deficit. But in fact, a subsidy of 10 trillion yuan is not an unattainable number. This is equivalent to a subsidy of 7,000 yuan per person, which is about 1,000 US dollars. We know that the United States has distributed thousands of dollars to its residents during the epidemic, and Hong Kong has also distributed the same amount of cash to its residents.   So how do we raise funds for cash subsidies? I think fiscal deficit is one way, but there are other ways. For example, China has a large number of state-owned enterprises, which generate about 4.6 trillion yuan in profits each year. These profits can be transferred to residents through local governments, and half of the problem is solved. If the scale of 10 trillion yuan is impossible, then 4.6 trillion yuan in subsidies is not a small amount.   I think that the current efficiency of using fiscal funds for infrastructure construction is very low, while the benefits and efficiency of directly distributing them to residents are very high, and the impact on enterprises will be better, because only when terminal consumption rebounds can enterprises achieve sales and profits. Therefore, if public funds can be used more to support consumption and increase demand, I support it; but if public funds are used more in inefficient departments and fields, I oppose it.   According to statistics, the role of state-owned enterprises in innovation is still lacking, and market innovation mainly comes from large companies and private enterprises. For example, most advanced defense technologies are based on the technological development of private enterprises, and the situation in the United States is similar. If we do not have a market-oriented environment, private enterprises such as drone manufacturer DJI will not succeed.   So, what is the current outlook for China's startups? The number of new unicorns (startups valued at $1 billion or more) in China has declined in the past few years. China's entrepreneurial environment is facing tremendous pressure. Venture capital mainly relies on industry funds established by the government, while private investment has decreased. At the same time, some policies that are unfriendly to venture capital funds have also emerged, making it difficult for venture capital to exit and for startups to go public or raise funds.   This leaves startups with no choice but to seek investment from government funds, but government funds often require collateral, and startups lack existing assets. Investments by companies such as Xiaomi, Tencent and Alibaba (current owner of the South China Morning Post) in certain areas have promoted innovation, product development and the development of many startups, but these expanded investment activities have also triggered discussions about the "disorderly expansion" of capital. As a result, many large private enterprises are also facing public pressure in the investment field.   SCMP: As competition between China and the United States deepens, the global economy is expected to further diverge. How do you view these issues and how should China respond?   Mao: The most common question when I visited the United States in 2014 was "What on earth has happened in China?" For the United States, China has undergone tremendous changes since the reform and opening up, but these changes do not meet the original expectations of the United States. During another visit in 2017, I found that the United States is basically convinced that these changes are not in the interests of the United States. Since then, the Republicans and Democrats have reached a consensus to contain China, and this sentiment is very hostile. Therefore, in recent years, not only has the competition with China in the traditional economic field increased, but also the confrontation of ideology and values has emerged.   I believe that the great power game between China and the United States is irreversible. For China, after a period of ambiguity, it has also found its own development path very clearly. With the rise of economic and diplomatic strength, China has also formed a development path that is completely different from that of the United States.   The situation between China and the United States is turning into a long-term confrontation. I think our initial assessment of the Sino-US trade war in 2018 was inadequate. The United States has launched trade disputes against almost all of its trade opponents, including allies such as Canada, the European Union and South Korea, but the key point is that we need to pay attention to the difference between the trade war between the United States and its allies and the trade war with China. The trade war with allies is an adjustment of trade relations, while the trade war with China is an all-round competition or even containment.   I think the China-U.S. trade war is heading toward a "new Cold War," and decoupling is somewhere in between. Both sides believe that their values are irreconcilable with each other, so there must be winners and losers.   SCMP: Over the past year or so, there has been increasing concern in the West about China’s overcapacity. Do you agree with this view?   Mao: I think the United States is trying to weaken China's supply chain capabilities and resilience in the name of correcting the trade imbalance between the two countries.   First, trade imbalances are caused by different industrial structures. In other words, if the United States does not buy goods from China, it will have to buy them from other countries at higher prices. Therefore, in my opinion, the "capacity transfer" or "supply chain diversification" measures must be aimed at weakening China, not necessarily strengthening the United States, and the ultimate goal is to reshuffle the world's supply chain pattern.   Second, I think the US and its allies are trying to curb the development of China's advantageous industries, which happen to be China's "new three": photovoltaics, lithium-ion batteries and new energy vehicles. The overcapacity issues surrounding these industries have already attracted attention.   I was a little disappointed that (U.S. Treasury Secretary) Janet Yellen raised the issue of overcapacity as an economist, because economists know that a country's large exports usually exceed domestic demand. For example, crude oil exports from the Middle East are a form of overproduction, right? There is also overproduction of agricultural products in Australia, and the same is true for grain production in the United States. An exporting country must have overcapacity in its domestic production.   China has experienced several rounds of overcapacity and capacity adjustment, so this is a normal market phenomenon. Of course, we must also see some problems in China itself. During the period of economic growth downturn, our demand shrank faster than supply, while supply-side structural reforms, high-quality development and other policy efforts have driven the recovery of supply faster than demand. In particular, due to the reduction in investment opportunities, companies will strive to seize and seize market opportunities, which is one of the reasons why new energy has become an over-investment area in China.   China needs to take more resolute measures to absorb its own production capacity at home, because we may continue to face obstacles in the trade field under pressure from the United States. China should also further enhance its competitive advantages in key emerging industries. For example, if it can continue to achieve technological innovation in the field of new energy, relying on the current cost advantage, it can greatly reduce its dependence on traditional energy such as fossil fuels, which will also change the global energy landscape.   SCMP: As a newly appointed professor at the University of Hong Kong, how do you view the role that Hong Kong will play as China enters a period of economic transformation?   Mao: Hong Kong's role has changed from being Asia's financial center to being a super link between mainland China and the world. Now I think Hong Kong's future development is becoming clearer.   My own judgment is that in the context of Sino-US competition, Hong Kong cannot simply maintain its position as an international financial center. I think the biggest difference between Singapore and Hong Kong is that Hong Kong can provide financial services for mainland companies to enter the international market. Singapore cannot play this role in Southeast Asia because its economic relations with these countries are not as good as Hong Kong's relations with the mainland. But the problem now is that with the reduction of financial transactions between the mainland and the United States, Hong Kong has lost an important source of business, and the mainland's economy is in a period of transformation, which has also magnified the disadvantages of Hong Kong as a financial center.   However, these unfavorable factors have not brought about fundamental changes to Hong Kong's economic structure and common law system. Hong Kong remains the most international city in China and still has many advantages in areas such as certification, testing, and international arbitration, which are irreplaceable by other Chinese cities.   Education is an important area that Hong Kong can develop in addition to traditional industries. Hong Kong has the highest English proficiency in the country and can provide common law training. Hong Kong has five universities on the list of the world's top 100 universities. In fact, the income brought by the expansion of postgraduate enrollment in Hong Kong in the past two years is also considerable. The annual tuition fee for a student is about US$50,000, and their consumption activities in Hong Kong are also an important source of economic growth. Hong Kong should also recruit students from other countries, including developed countries and countries involved in the "Belt and Road Initiative".   Given the current situation of Sino-US confrontation, Chinese scientists and high-tech practitioners in the West may have the desire to leave the United States, but they have concerns about moving to the mainland. These concerns include children's education, international exchanges and wealth security. They are also worried about their investments, so they may choose to go to Hong Kong first. In addition to attracting these technical talents to Hong Kong's universities, it is also necessary to attract large technology companies from China and other parts of the world to Hong Kong.   Some technology companies in the mainland need to attract international talents, but many international employees may be unwilling to immigrate to the mainland. Hong Kong's low tax rate, coupled with the advantages of the common law system and a high degree of internationalization, can meet their needs for environment and life.   With the development plan of the Guangdong-Hong Kong-Macao Greater Bay Area (regional integration), Hong Kong and Shenzhen can complement each other in terms of technological development, so Hong Kong has the potential to build a technology industry. There is a large amount of idle land in the areas where Hong Kong and Shenzhen are connected, and the cost of using it may be lower than that of Shenzhen. Hong Kong can be at the forefront of China's technological development and play a leading role in the world.   Hong Kong is currently in a period of transformation, although it is a passive transformation. One of the short-term problems it encounters is its dependence on finance, but this also provides motivation and opportunities for Hong Kong to explore development in other areas. If the relationship between China and the West improves in the future, Hong Kong will continue to be an international financial center and has the potential to build itself into a technology center.   SCMP: On July 18, China concluded the Third Plenum, an important meeting of the CPC Central Committee held approximately every five years, which sets the direction for China's economic policies. What do you think of this meeting and its outcomes?   Mao: First, we need to understand the background of this meeting. This year's Third Plenary Session is a core meeting of the Chairman's third term, not an occasion for the new leader to announce groundbreaking ideas. Therefore, the central government will not make a huge policy shift, but will definitely make more comprehensive, specific and systematic arrangements for deepening reform and opening up. This was my judgment before the meeting, and the results also confirmed this.   Secondly, I would like to point out that the Decision adopted and issued by the Third Plenary Session of the 18th CPC Central Committee confirmed that China will continue to adhere to the socialist market economic system, give full play to the decisive role of the market in resource allocation, and equally protect all kinds of ownership economies. These contents have dispelled some doubts in the market and society and will have a positive impact on stabilizing expectations. At the same time, the Third Plenary Session of the 18th CPC Central Committee also clearly put forward the work priorities in the fields of national security, ideology and state-owned economy, which can provide a specific framework for future development.   Third, the Third Plenary Session provided guidance for reforms in important areas of China's economy, such as fiscal and taxation system reform. On the issue of the relationship between the central and local governments, the Decision put forward some new ideas, namely, appropriately expanding the "taxation" rights of local governments, including the central government will gradually transfer consumption tax to local governments, etc. Another important message is to vigorously develop science and technology and emphasize the importance of establishing a unified national market.   Overall, I believe that the Third Plenary Session of the 18th CPC Central Committee is crucial to the stability and recovery of China's economy. Continuing to comprehensively deepen reform and opening up will enhance the total factor productivity of China's economy and also help improve the medium- and long-term growth center of China's economy.

The green and sustainable finance second-party opinion report published by China Chengxin Green Finance International (CCXGFI) provides systematic and forward-looking assessments of an issuer's Environmental, Social, and Governance (ESG) performance, based on the issuer’s relevant finance framework or any specific sustainable project. Our methodology is designed to ensure consistency and rigor, utilizing a structured approach supported by standardized procedures and robust indicators.   Multi-Layered Evaluation Framework In general, CCXGFI employs a four-level scorecard matrix structured through AHP (Analytic Hierarchy Process), comprising 4 first-tier indicators, 9 second-tier indicators, 18 tertiary indicators, and 33 quaternary indicators. Each layer of the matrix is composed of carefully selected indicators, with consideration given to the issuer’s industry context, scale of operations, and regional factors. By evaluating both qualitatively and quantitatively, these layers are expected to reflect the depth and breadth of our analysis of the issuer’s sustainability and social responsibility efforts.   Stage 1: Assessing Core Principles Alignment This foundational layer examines the issuer’s alignment with the Green Bond Principles 2021 (June 2022 Appendix 1), Social Bond Principles 2023, Sustainability Bond Guidelines 2021, The Green Loan Principles 2023, and Social Loan Principles 2023, specifically regarding the use of proceeds, project evaluation and selection processes, management of proceeds, and reporting. This stage determines the issuer’s overall commitment to sustainability and responsible financing. Use of proceeds: We review how the issuer allocates proceeds and ensure that project categories align with established sustainability principles. Project Evaluation and Selection: We assess the issuer’s organizational structure and selection process to ensure a logical structure and adequate oversight. Management of proceeds: Best practices include clear management methods and allocation processes, with an emphasis on transparency and accountability. Reporting: We scrutinize the issuer’s reporting plans and content, focusing on the frequency, clarity, accuracy, and consistency of disclosures.   Stage 2: Relevance to Internal Sustainable Development Strategy At this level, we evaluate the extent to which sustainability principles are integrated into the issuer’s governance structures and strategic decision-making processes. This includes a thorough evaluation of policies, community commitments, and alignment of core operations with sustainability goals. Stage 3: Feasibility of Environmental and/or Social Objectives This layer focuses on the practical implementation of sustainability strategies. Our analysis covers the alignment of the issuer’s projects with relevant national, industry, and regional policies, and evaluates their effectiveness by delivering actual environmental and social benefits.   Stage 4: Effectiveness of Risk Management The final stage of our methodology assesses the issuer’s risk management framework, focusing on the identification and mitigation of potential environmental and social risks. We evaluate the issuer’s internal control systems and their capacity to manage and minimize any adverse impacts, ensuring that sustainability objectives are met in a responsible manner. Scoring and Rating Process In the scoring process, each indicator is assigned a score (ranging from 0 to 1) based on the degree to which the sustainable finance framework complies with the relevant market requirements. The weighted average score is then calculated, forming the basis of the final rating assigned to the evaluated company.