More private capital needed at urbanization's disposal

China Daily: That means the entire autonomous region is …

Wang Heshan: In full swing… We are confident. We feel there is no reason for us not to do things well as the central government has given us such a good policy. If we can not make good use of it, won't we lose face? So simply speaking, we are all out to make the inland opening-up in Ningxia a success.

China Daily: I heard on the opening day of the Ningxia Delegation to the NPC that Party chief Zhang Yi said Ningxia is really a beautiful place, but a lot of tourism resources can not be shared due to inadequate transportation. You also said that, as more and more people want to get equal public service and the financial burden for local governments are getting bigger. Both lead to urbanization-related financing issues. You called on private financial institutions to play a role.

Wang Heshan: Finance is very important. Private finance was emphasized in the report to the Eighteenth National Congress of the Communist Party of China. You mentioned finance and some problems during the building of Ningxia inland opening-up pilot economic zone and Yinchuan comprehensive duty-free zone. I also want to talk about finance. Previously my work duty was fiscal management and I did not know much about the status quo of Ningxia's finance sector. But as the government allocated me to take charge of this part of work this year, within less than one month, I read some materials on Ningxia's finance and realized some problems. Maybe the same problems exist in all poor regions. Ningxia relies too much on local deposits and loans. The scale of social financing is too small. Some financial products are rarely used in poor regions and it's hard to let them play their roles. This will perhaps be a bottleneck for "opening-up westwards". There are two priorities in "opening-up westwards". One is tourism. Why? Tourism is a comprehensive thing. It's not only about tourists coming to play and enjoy themselves. It will bring in a flow of people. Yesterday I heard someone say that everything can be tourism resource. I think this viewport is right. For example, if you walk on a street, you see people greet each other warmly, live in harmony and you get services by people with big smiles, you may feel very warm too and feel close to this city or county. This is a kind of resource. Besides, if the street is very clean and the toilets are easy to find, this is also a type of resource. All these resources can be tourism resources.

Also, finance should be the other priority. Why? In my view, firstly, poor regions lack good ideas and concepts. The core of this problem is a lack of group of talented people. Secondly, these regions are poor as there is no capital. But capital shortage does not mean that others just give money to you. I think as the market economy has developed for so many years, we should think about how to use the funds in the society. We should not entirely rely on the central government. We will not rely either. But how can we use affluent funds in the society? We need to enlarge the scale of social financing. By the end of 2012, banks in Ningxia had received deposits totalling 359 billion yuan and lent 334 billion yuan worth of loans. The loan-to-deposit ratio has exceeded 90 percent. That means the financial regulatory institutions of the central government have already been very supportive of Ningxia. We have made full use of bank deposits in Ningxia as banks have lent 96 percent of them. But if you gather indicators on other financing channels, you will find very limited funds are acquired. That means businesses are forced to rely solely on banks for funds. There are no financial products such as trusts, funds, securities, guaranties or leases for businesses so they have no alternative but turn to banks. But if we could widen financing channels, funds from other areas can also come into Ningxia. Now we can only rely on Ningxia's local funds. If inland Ningxia wants to open up, it should first open to domestic financial institutions and enterprises. If trust companies, fund companies, securities companies and insurance companies come to Ningxia to set up outlets, won't they bring money? Won't they enliven Ningxia's financial sector? Ningxia, the only Muslim autonomous region of the country, is now opening up westwards, to Arab countries and to Muslim regions. If we could attract their financial institutions and usher in their money, Ningxia's financial sector will become very dynamic. And if there are funds, all types of enterprises may come to Ningxia too. If businesses can prosper in Ningxia and industries get developed, Ningxia's urbanization will grow faster and the quality will be better. Ningxia's development will enter a fast lane and the pilot of inland opening-up will be a success. The opening-up of Ningxia to domestic areas, to Arab countries or to Muslim regions may kick off from the financial sector. I heard an Arabic financial institution set up an outlet in Shanghai. I was very curious. Why they did not come to Ningxia? Ningxia Hui people are close to them in many cultural ways and Ningxia might be a better place for them to live. I guess Shanghai might be better than Ningxia in some areas, including its financial environment. We need to create some good conditions to attract them to Ningxia, including fiscal policy, public service and talents. For example, Dubai used to have a population of only 700,000, but now it has more than 7 million people. Almost ten times of its original population have come from outside Dubai and those people have developed Dubai very well. So, funds and talents are really important. Ningxia will roll out policies to attract funds and talents and let them settle down.