#China's Industrial Business Card# #Amazing Chinese Infrastructure#

It's hard to pinpoint when, but at some point, many people's attitudes towards finance became as fearful as they would be towards a flood or a beast.

In fact, we can all imagine such a question: suppose there's a mine in your yard, and you can just dig it out and sell it to make money.

But the problem is, if you want to dig it out, don't you need a mining machine? Don't you need to build a road to transport it out? Don't you need to buy a few vehicles for transportation?

Adding all this up, it might cost tens of millions, or even hundreds of millions. But your monthly salary is only 5,000 yuan. If you want to save enough money to start mining, it would take five or six hundred years, so you can just wait.

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Change the way of thinking, if someone lends you money, you dig out the mine, make money, and then pay back the principal and interest, and what you earn after that is all yours. You can also hire local people to work, everyone's salary will be improved, they may go to the restaurant, so there are restaurants and shopping malls, need to hire more people, the whole community has become rich like this.

This is why Marx said that if you save enough money to build a railway, the railway would not have appeared by now.

This example is the same for a community, and the country is almost the same. The purpose of finance is to provide start-up and operating funds for society.

When our country was founded, it lacked money to mine, smelt steel, and modernize, and needed a large amount of money to achieve industrialization. So in the early stage, capital was introduced, and then joined the WTO to make rapid progress, and finally accumulated a large amount of funds, entered a positive feedback cycle, and grew rapidly.

Nowadays, our country also has the world's second-largest capital market, second only to the United States. To paraphrase Marx, if we had also prepared to save enough money to develop instead of introducing external capital, it might take another three hundred years.If we carefully compare mature economies with countries that are less developed, what is the biggest difference between them?

In essence, it's a question of whether they can finance large-scale projects. It's a simple truth, just like whether you can get rich mainly depends on whether you borrowed money to buy a house a decade ago, the same applies to countries.

Nowadays, the competition between countries is more about the competition of super projects. For example, the semiconductor industry that our country has been frantically tackling in the past two years requires an investment of hundreds of billions, which was unimaginable before. Now, through financial means, this plan has become possible.

Let's take another example. Suppose you have a factory, you owe someone a sum of money, and you need to repay it immediately, but you don't have a penny on hand, all of which has been used for purchasing goods, and the goods will only be sold next month. What should you do in this month? Go bankrupt and run away if you can't repay it?

Of course not, you can just borrow some money from the bank to bridge the gap. In this way, the company can continue to grow and expand.

More importantly, without financial tools such as futures, insurance, and hedging, many businesses cannot be carried out. For example, we have always been talking about why the West can make great achievements in the great voyages?

The most critical is that they have created two pioneering financial tools, insurance and the joint-stock system.

Insurance is easy to understand. You have a ship full of goods going out to sea, and you spend some money to take out insurance. Even if the ship capsizes and the goods are lost in the ever-changing sea, the insurance company can still pay some. It's equivalent to reducing the risk by a large margin.

Even more powerful is the joint-stock system. Without the joint-stock system, those ocean-going companies would not be able to raise enough money, and the great voyages would not have developed so quickly.

To this day, it is still the same. Without these two, the vast majority of companies would not exist.So the progress of human history follows this sequence: first came the commercial revolution, then the financial revolution, and only after that did the industrial revolution emerge. Without the financial revolution, none of what came later would have existed.

In other words, finance is much more important than people imagine, and it can even be said that finance has been playing a role in the world similar to that of water supply and power systems.

For our country, finance is also different from the United States' endless pursuit of various derivative arbitrage, and our country cares more about the support of finance for the real economy. For example, I have been deeply impressed by a plan of WeBank in the past two days.

In the next three years, WeBank will increase the coverage rate of supply chain finance to 90%, focusing on five major directions: people's livelihood consumption, new infrastructure, green energy, modern agriculture, and specialized and refined new industries, covering hundreds of sub-industries. The goal is to cooperate with more than 1,000 leading enterprises in the industry and to invest 300 billion yuan of exclusive funds. This mode of behavior is actually the mode of financial support for the real economy that we mentioned earlier.

Our future vast sea of stars will also need this mode, and the core of this financial model is that it is not only to serve a few rich people, but more importantly, to serve the welfare of the majority.

Dalio has a saying that I think is very reliable. He said that investing in China must have a basic underlying logic, that is, the capital here must serve the interests of the majority, and the decision-makers will not act according to the will of the rich, which is called state capitalism.

If you summarize the whole text in one sentence, it is: China's financial and capital markets are expected to usher in great development in the next few years, and the key lies in whether the capital investment projects can serve the majority of people and the real industry.