Essential to coordinate development and security

In his written address to the 2021 Annual Conference of the Financial Street Forum in Beijing on Wednesday, Vice-Premier Liu He said the authorities need to prevent and control financial risks, adhere to market-oriented and law-based principles, and seek a dynamic balance between risk prevention and stable development.

As he pointed out, although there are some problems with the real estate market, the risks are generally under control, and the market players' reasonable capital needs are being met, and the overall trend of the healthy development of the real estate market will not change.

Also on Wednesday, Yi Gang, governor of the People's Bank of China, the country's central bank, said at a forum on international banking that the spillover effects of the debt crisis of the Evergrande Group, one of the largest real estate enterprises in the country, is controllable, adding that the country has the ability to contain the risks.

But it is necessary for the authorities to address the problem of financial institutions' reluctance to lend so as to meet the reasonable financing needs of real estate enterprises, as the main challenge now is the reduced risk appetite of financial institutions.

Stepping on the brakes in the high-speed operation of the property market definitely generates a reaction. China's real estate market has experienced many downward cycles due to regulation. The difference this time is that individual large-scale real estate companies are exposed to risks as financial institutions' lower risk appetite for the real estate industry has dragged some normal enterprises that meet the regulatory requirements into a liquidity crisis.

The authorities must strike a balance between maintaining steady growth and preventing risks, and prevent secondary financial risks in the course of dealing with risks in other areas. That's exactly how the Chinese economy has weathered the series of crises over the past decades.

Notably, Vice-Premier Liu also vowed the government's support for clean and efficient use of coal, and the development of new energy to guarantee energy security. That means China will not resort to campaign-style actions to reduce emissions, which would threaten the security of energy, food and the country's supply chains.

As such, it is imperative for governments of various levels to plan their work regarding development, reform and security as a whole to guarantee the development's quality, efficiency, fairness, sustainability and security.