| Safeguarding financial stability is a major issue that China must pay close attention to,especially when China's reform has entered a deep-water zone and a tough period.China's economic development environment has become more complicated and changeable,and many outstanding problems with unbalanced development have not been resolved yet.At the same time,in recent years,the process of China's financial product innovation has been accelerating and the type of financial products has continued to increase.The price of real estate in the first-tier and second-tier cities has been high,while the inventory of real estate in the third and fourth-tier cities is outstanding.These indicate that the potential risk of financial instability in China has became increasingly obvious.Under such circumstances,how to firmly adhere the bottom line of not having a financial crisis is a realistic issue that we need to study in depth.The 2016 Central Economic Work Conference pointed out:"We must put more emphasis on preventing and controlling the financial risks,determine to dispose a number of risk points,focus on preventing and controlling asset bubbles,and improve the regulatory capability to ensure that no systematic financial risks occur.At the time when the Central Bank's Work Conference held in early 2017 decided on the ten major tasks for the year,the issue of financial risk is placed before financial innovation,and the orientation of "financial markets" was changed from innovation to smoothly and healthy development.In October 2017,the 19th National Congress of the Communist Party of China re-emphasized:"We should improve the financial supervision system and keep the bottom line of systemic financial risks."There are many factors that affect regional financial stability:At present,China's financial development has entered a period of accelerated shifts,and the leverage,relevance,and complexity of the financial system continue to increase.The risks in the financial markets such as the stock market,foreign exchange markets,and bond markets have increased.Risks such as shadow banking,internet finance,and local government debt are also accumulating,more and more illegal and criminal risks and liquidity risks are emerging.The influence of regional financial instability on systemic financial risks is obvious.With the inducing,accumulating,and spreading of regional financial risks,it is easy to cause nationwide systemic financial risks.One of the most realistic factors that influences regional financial instability is the real estate market problem.Among those problems,the most pressing issue is real estate price and inventory.In 2015,China explicitly proposed the destocking policy,which showed that the accumulation of real estate stocks has reached the bottom line of financial stability.While After the de-inventory policies were implemented,the real estate price issue became prominent,among which the soaring prices in the less developed regions and the third and fourth tier cities has also had a negative impact on local financial stability.Then we can't help asking such questions:Did real estate inventory problems and price issues make different effects on financial stability in different regions?Is there an interconnectedness between real estate inventory and prices,and is there a difference in the connectivity between developed and underdeveloped cities?This article is trying to answer these questions,explore the impact of real estate market changes on regional financial stability,and from the perspective of destocking and curbing the rapid rise in real estate prices,put forward some measures to maintain regional financial stability.In order to achieve the above research tasks,The article is divided into the following 6 chapters:Chapter 1:Introduction.This chapter first introduced the research background,the theoretical and practical significance of the study,reviewed and evaluated the research status of financial stability,regional financial stability,and the impact of the real estate industry on financial stability at home and abroad,and then proposed the research thoughts of the paper,summarized the contents of each chapter with the help of block diagram,finally summarized the innovation and deficiencies of the article.Chapter 2:The theoretical and methodological basis for the study of regional financial stability.The first section explained the general theory of financial risk,defined the connotation of regional financial stability,elaborated the characteristics of regional financial risks,and discussed the hidden dangers,influencing factors,and harmfulness of regional financial stability in China;Section ?.Mainly in combination with the above analysis and China's national conditions,it summarized some of the influencing factors mentioned in the current regional financial stability evaluation,and divided the factors that influence regional financial stability into exogenous factors and endogenous factors,then examined their representative indicators.It provided the basis for the selection of indicators for the empirical research in Chapter 4.Section III described the research methods for regional financial stability in this paper.This paper intends to rely on the theory of financial geography to emphasize the regional linkages of regional financial stability,while Spatial econometrics is the main model method for studying regional financial stability,and the gravity model is used to highlight the regional linkage of regional financial stability.The empirical analysis in Chapters 4 and 5 of this paper is based on this methodology;The fourth section illustrated the analytical framework of the issue of regional financial stability.Chapter 3:Analysis of regional differences in the real estate industry.The first section defined the regional division of cities in China and the classification of urban grades,analyzed the trends and differences in the proportion of real estate industry's added value in GDP since 2009,and then discussed the impact of the overall development of the real estate industry on financial stability.The second quarter mainly analyzed the data of real estate prices and financial systems in various regions since 2009,and graphically showed the trends and differences in the rapid rise in real estate prices in the East,Central and West regions and representative cities,as well as the local financial system.As a result,it has been found that the relationship between real estate price trends and local financial stability in more developed regions and underdeveloped regions is somewhat different:Compared with underdeveloped regions,the links between housing prices and financial stability indicators related in the more developed regions are weak.Then the question is:Does the effect of housing price inflation on regional financial stability depend on the level of economic and financial development in each region?The third section mainly elaborated the definition of real estate inventory,and analyzed the correlation and difference between real estate inventory and financial system data in various regions since 2009.Similar to the previous section,the chart found that compared with the more developed regions and urban areas,the real estate stocks in more backward areas and cities have more significant impact on local real estate prices and finance.At the same time,it was found that the real estate industry differences between different provinces and different cities are even more pronounced.As a result,we raised another question:Are regions with different degrees of economic and financial development different from their real estate inventories?Are their effects on local financial stability different?Is the impact of real estate inventory on house prices different in developed and underdeveloped cities?The subsequent empirical work in Chapters 4 and 5 is centered on these issues.Chapter 4:The impact of the real estate industry on regional financial stability:Based on provincial panel data.In the first section of this chapter,the indicators proposed in Chapter 2 were used to comprehensively evaluate the financial stability of provinces and regions.The results showed that areas with higher levels of traditional financial development(such as Beijing and Shanghai)and areas with rapid development of emerging Internet finance(such as Jiangsu,Zhejiang,etc.)are at the forefront of the comprehensive assessment of regional financial stability;Section II briefly introduced the spatial panel model and the gravity matrix as a spatial weight matrix to describe the linkage of regional finances,at the same time,regional financial attractions are ranked,then we found that regions with higher levels of traditional financial development and emerging regions with fast Internet finance are more attractive to financial interests in other regions;Section III maked comprehensive scores on regional financial stability obtained in Section I For the explained variable,at the same time,the real estate price index,inventory index,and real estate industry development index analyzed in Chapter 3 are used as explanatory variables,and then the gravity matrix of the second section of this chapter is introduced into the model to conduct a spatial panel modeling.It is found that for the undeveloped areas,the real estate price factor,the real estate inventory factor of the per capita backlog,the per capita general inventory has a greater negative impact on the financial stability of the region.Chapter 5:The impact of the real estate industry on regional financial stability:Based on city panel data.Considering the descriptive analysis in Chapter 3,it showed that the difference between cities in the real estate industry is much larger than that between the provinces.Analyzing the data in urban is more practical,However,due to the availability of data,it is difficult to make a comprehensive evaluation and modelling of the financial stability of cities as a whole,In view of the fact that property prices and inventories in the less developed regions have a significant impact on regional financial stability,and that the inventory indicator-"the area to be sold" is available in urban data,this chapter focuses on the relationship between real estate inventories and prices in cities,with a view to studying the relationship between real estate inventories and prices on the basis of the conclusions of chapter 4.Furthermore,it is inferences whether urban real estate inventory affects the financial stability of the city by influencing the real estate price.The results showed that:financial stability is affected by the combination of real estate inventory and prices.Real estate inventory growth in less developed cities involved in modeling has a positive effect on the increase in real estate prices,while the relationship between real estate inventory and prices in more developed cities is not obvious.Therefore,combining the conclusions in Chapter 4,we inferred that the increase in real estate inventories in less developed cities has had an adverse effect on financial stability.This shows that,compared with developed cities,underdeveloped cities should be more cautious about de-stocking policies.Chapter 6:Conclusions and Policy Recommendations.Based on theoretical analysis and empirical analysis,the main conclusions of this paper are as follows:(1)The rise in real estate prices has brought negative impacts on the financial stability of different regions and cities.This effect is even more serious for underdeveloped regions.(2)The impact of real estate inventory on regional financial stability is different.Maintaining a proper stock of real estate inventory in developed regions is conducive to regional financial stability,while real estate inventory in backward areas has a negative impact on regional financial stability;in the case of urban finance,real estate inventory also has a negative impact on the financial stability of underdeveloped cities.Finally,this chapter proposed some specific policies recommendations based on the relationship between regional financial stability and real estate inventory and price. |
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