（Correspondent: Gao Yifei）The 68th Xi Xian Forum, sponsored by the Center for International Cooperation and Disciplinary Innovation of Income Distribution and Public Finance at the Zhongnan University of Economics and Law and the university's School of Public Finance and Taxation, was successfully held on December 19, 2024, in Wenqin Building's Conference Room 119. Wang Ziqi, a lecturer from the School of Economics at Southwestern University of Finance and Economics, was the keynote speaker for this academic forum, delivering a speech titled "Narrowing the Interest Margin and the New Enterprise Financialization". The forum was moderated by Zou Jianwen, a researcher at the Center for International Cooperation and Disciplinary Innovation of Income Distribution and Public Finance, and attended by over 10 participants, including the researcher Lin Jiada and Wan Qian from the Center.
During the forum, Wang explored a series of new phenomena and problems arising under the policies aimed at financially supporting the real economy. He noted that driven by these policies, the financial system has continually delivered interest to the real economy, hence achieving favorable results. However, as the net interest margin narrows and bank competition intensifies, some enterprises engage in arbitrage by securing low-interest loans from major banks and depositing them at higher interest rates in smaller banks. Wang Ziqi emphasized that understanding the intrinsic mechanisms and macroeconomic impacts of this phenomenon is not only a novel topic for theoretical research but also essential for refining policy design.
Wang began by outlining several stylized facts and, based on these, developed a general equilibrium model incorporating heterogeneous banks and enterprises. This model simulates the effects of narrowing bank interest margins on enterprise financialization and the real economy, exploring how to enhance financial services to the real economy through an interest rate self-regulatory mechanism. His research concluded that lower interest margins are not necessarily the most effective for serving the real economy. When the interest margin between deposits and loans exceeds the ideal margin, the reduction in loan rates by large banks can effectively facilitate "financial concessions". This leads to an increase in total output and a decrease in inflation. However, if the interest margin between deposits and loans is too narrow, it may trigger the financialization of large enterprises, causing a decrease in total output, an increase in inflation, and a reduction in the effectiveness of financial services for the real economy.
In addition to providing an academic analysis of the new facts and phenomena in China's financial development to expand the traditional financial development theory, Wang integrated the latest research on "enterprise financialization" and "financial concession" in recent years. He further answered the problems related to the policy pathways and effectiveness of finance in serving the real economy. His work makes a marginal contribution to deepening the understanding of China's unique path of financial development and constructing a financial theoretical system with Chinese characteristics.
Wang's engaging presentation not only captured the audience's attention but also stimulated thoughtful discussion on the role of the financial sector in supporting the real economy. During the subsequent discussion segment, participants actively engaged in dialogue, exchanging views on various topics such as current financial policies, and optimizing financial concession policies.
Guest Profile
Wang Ziqi, Ph.D. in Economics from Xiamen University, is currently a lecturer at the School of Economics, Southwestern University of Finance and Economics. His main research fields include macroeconomics, development economics, with recent attention to monetary finance and enterprise innovation. His research findings have been published or are under final review in the Economic Review, China Economic Studies, and Journal of Quantitative & Technological Economics.