Review of the Development of Bill Market in 2020

At the beginning of 2020, the epidemic situation of novel coronavirus had a significant impact on the smooth operation of the economy at home and abroad. With the joint efforts of all parties in the market, the bill market quickly returned to normal operation, gave full play to the market function of policy transmission and support entities, and played a positive role in promoting the stabilization and rebound of the macro-economy. The total business of the bill market for the whole year was 148.24 trillion yuan, an increase of 12.77 percent over the same period last year Of this total, 22.09 trillion yuan was accepted, an increase of 8.41%; an endorsement of 47.19 trillion yuan, an increase of 1.55%; a discount of 13.41 trillion yuan, an increase of 7.67%; and a transaction of 64.09 trillion yuan, an increase of 25.81%. The weighted average discount rate of bills for the whole year was 2.71%, down 60 basis points from the same period last year, and the discount rate was 2.98%, down 47 basis points.

I. the bill market has made remarkable achievements in fighting the epidemic and supporting economic development.

(1) the bill market embodies the "anti-epidemic responsibility" and strongly supports the resumption of production and work of enterprises. After the outbreak of the novel coronavirus epidemic at the beginning of the year, according to the unified deployment of the people's Bank of China, the Shanghai Securities Exchange quickly issued the "Circular on further strengthening the Bill Business support Service for COVID-19 's epidemic Prevention and Control work." by providing special services, initiating emergency mechanisms, and reducing or reducing relevant fees, we will fully support the anti-epidemic work and promote enterprises to resume production and work. Among all kinds of financing methods of enterprises, bill financing quickly returns to the normal level. The volume of acceptance and discount business in March reached 2.47 trillion yuan and 1.81 trillion yuan respectively, an increase of 91.26% and 71.14% respectively over the peak of the epidemic in February, and quickly recovered to the level of the same period in previous years. In the first quarter, the acceptance amount and discount amount of bills in the whole market increased by 12.12% and 22.26% respectively compared with the same period last year; at the end of March, the acceptance balance and discount balance of bills increased by 10.58% and 13.19% respectively.

(2) the bill business continues to extend forward, and the coverage of enterprises is further expanded. In 2020, the Shanghai Securities Exchange will launch the supply chain bill platform, build and complete the cross-border RMB trade financing transfer service platform, and continue to promote innovative products such as standardized bills, "discount pass" and "PayPay pass". We will further promote the work related to the disclosure of commercial paper information, and strengthen market publicity and business development in conjunction with member units, further expand the service radius of the bill market, and enhance the coverage of the bill market to enterprises. For the whole year, the total amount of tickets used by enterprises totaled 82.7 trillion yuan, an increase of 4.27 percent over the same period last year, and the number of entrepreneurs using tickets totaled 2.7058 million, an increase of 11.22 percent over the same Among them, small and micro enterprises used 44.03 trillion yuan, accounting for 53.24%, and 2.5031 million small and micro enterprises used tickets, accounting for 92.5%.

(3) the regional structure of the bill market is stable, with strong support from key areas. For the whole year, the total bill business in the eastern region accounted for 65.0%, basically the same as the same period last year; the central region and the western region accounted for 15.3% and 14.59% respectively, increasing over the previous year; and the northeast region accounted for 5.12%, slightly lower than the previous year. During the critical period of fighting the epidemic at the beginning of the year, the bill market gave strong support to Hubei, effectively promoting the resumption of work and production of enterprises in the region, and realizing the stabilization and recovery of the regional economy. In March, the total bill business in Hubei reached 503.939 billion yuan, an increase of 179.61 percent over February and 7.9 percent over the same period last year. Wuhan's bill business totaled 324.758 billion yuan, an increase of 199.49 percent over February and 5.37 percent over the same period last year.

(4) there has been a marked increase in the use of tickets in key industries, effectively reflecting the macro policy guidance and industrial structure adjustment. In 2020, the amount of tickets used by the main anti-epidemic industries, such as medicine and biology, transportation, warehousing and postal services, increased by 5.13% and 6.7% respectively, which was 0.86 and 2.43 percentage points higher than that of the industry as a whole. The amount of tickets used in the basic scientific research industry, the energy (resources) industry and the machinery and equipment industry increased by 12.38%, 9.75% and 6.42% respectively over the same period last year. The development and changes in the use of tickets in the industry fully reflect the responsibilities and actions of the participants in the bill market in fighting the epidemic and promoting the resumption of production and work; it also highlights the achievements of the bill market in supporting basic scientific research and implementing the green development strategy.

(5) the proportion of commercial bills issued has increased significantly, and the commercial credit environment of bills has been improved. In 2020, the amount of commercial tickets issued was 3.62 trillion yuan, an increase of 19.77% over the same period last year; the amount of commercial tickets issued accounted for 16.39%, an increase of 1.55% over the previous year; and the average denomination issued by commercial tickets was 1.247 million yuan, down 11.08% from the same period last year. In the case of further tilting the financial policy to small and micro enterprises, commercial banks expand their financing coverage to small and micro enterprises in the form of "commercial tickets issued by core enterprises and discounted commercial tickets on the industrial chain", which promotes the rapid development of commercial ticket business. At the same time, the electronic bill market and the continuous improvement of transparency have also created good conditions for the improvement of commercial bill activity and the reduction of par value.

II. The bill business of banking institutions is generally stable, and the market structure is becoming more balanced.

(1) the scale of silver bill acceptance has increased steadily, and the market share of different types of institutions has diverged. In 2020, the acceptance of silver bills in the whole market totaled 18.47 trillion yuan, an increase of 6.43 percent over the same period last year. Among them, the acceptance ratio of state-owned and joint-stock banks is 17.17% and 44.87% respectively, and the market share is steadily increasing; the acceptance ratio of urban commercial banks and rural financial institutions is 26.63% and 5.08% respectively, down 1.19% and 0.78% respectively from the same period last year.

(2) the discount scale has increased compared with the same period last year, and online financing is more active. The "discount pass" business breaks down the information barrier of the discount market and realizes the accurate matching of the bills to be discounted and the funds to be put in the whole country. By the end of the year, a total of 7819 enterprises had obtained bill brokerage services through the "discount pass", and 28165 bills had reached a discount intention, with a total amount of 46.98 billion yuan. A number of commercial banks have made great efforts to promote the development of the "second sticker" business, and customers have succeeded in less than one minute from initiating the discount application operation to the loan, effectively cracking the pain points of long inquiry process, many operation steps, long account arrival time and high financial cost in the traditional bill business, further promoting the online and "zero contact" development of the discount business, and achieving an effective balance between epidemic prevention and control and business expansion. Driven by various innovative businesses, the bill discount for the whole year was 13.41 trillion yuan, an increase of 7.67 percent over the same period last year, of which the commercial ticket discount was 1.03 trillion yuan, an increase of 9.85 percent.

(3) discount transactions are growing rapidly, and small and medium-sized institutions are active. In 2020, the discounted transaction volume of the whole market was 44.11 trillion yuan, an increase of 13.61% over the same period last year, and the growth rate was basically the same as that of the previous year. The scale of conversion discount transactions of joint-stock banks, urban commercial banks and rural financial institutions was at the top. For the whole year, the conversion discount scale of the above three types of institutions was 19.13 trillion yuan, 13.62 trillion yuan and 9.25 trillion yuan respectively, an increase of 20.65%, 13.79% and 34.32% respectively over the same period last year.

(4) the bill repurchase transaction is generally active, and the function of pledge financing continues to be enhanced. In 2020, the repurchase volume of the whole market was 19.98 trillion yuan, an increase of 64.87% over the same period last year, and the growth rate was slightly lower than that of the previous year. According to the type of institutions, the repurchase volume of state-owned banks was 7.61 trillion yuan, up 31.35 percent; that of urban commercial banks was 19.66 trillion yuan, up 118.94 percent; that of rural financial institutions was 5.46 trillion yuan, up 57.81 percent; that of securities companies was 1.89 trillion yuan, up 458.36 percent; and that of joint-stock banks was 5.01 trillion yuan, down 8.47 percent.

Third, the bill interest rate is generally downward, and the policy transmission efficiency is relatively high.

(1) the discount interest rate falls first and then rises, which is in line with the trend of the main interest rates in the money market. The weighted average interest rate of conversion discount for the whole year was 2.71%, down 60 basis points from the same period last year. After falling to an all-time low of 2.29% in May, the discount rate continued to rise to 2.91% in October along with other interest rates in the money market, falling at the end of the year. The interest rate in the bill market is closely related to the trend of other interest rates in the money market. The correlation coefficient between the 1D bill repurchase rate and the deposit institution pledge repurchase rate (DR001) is 0.98. The correlation coefficient between the bill repurchase rate and the DR007 is 0.80th 3m, 6m and 12m and the Shibor correlation coefficient of the same maturity is 0.68,0.80,0.89 respectively.

(2) the discounted interest rate on bills reflects the economic situation. The discount rate is sensitive to monetary credit, macro-prudential and other policy adjustments, and the trend for the whole year is also in line with the economic trend. Since the beginning of the year, in order to deal with the sudden epidemic, the central bank has taken various measures to reduce the comprehensive financing costs of enterprises, and the interest rate on bills has also dropped to the low level since the 2008 financial crisis. In the second half of the year, with the effective control of the epidemic, the economic recovery is obvious. The discount interest rate rebounded in the third quarter, reflecting the macro situation of stable economy and fully reflecting the market advantages of bills serving the real economy and reducing the financing costs of enterprises.

IV. Trend outlook

In 2020, the overall operation of the bill market is stable, and all kinds of business are increasing steadily. In the process of fighting the epidemic in the first half of the year, the bill market responded quickly, effectively transmitted the monetary policy intention, quickly and effectively expanded the financing scale, reduced the discount cost, and strongly supported the resumption of work and production of enterprises and the stabilization and recovery of the macro-economy. In the second half of the year, with the gradual recovery of economic development, the high growth rate of the bill market fell, and the bill interest rate also rebounded as the money market interest rate hit bottom, achieving an effective balance between promoting development and preventing risks. it also further highlights the target requirements of the bill market to serve the real economy.

2021 is the opening year of the 14th five-year Plan, China's economy will enter a new stage of development, and there will be new changes in the policy environment and market opportunities faced by the bill market. Especially when the importance of supply chain finance is prominent and the policy is good, bills have a great potential in the process of supply chain financial innovation and development. the landing of the commercial bill information disclosure system and the acceleration of the construction of differentiated bill projects have also laid a more solid foundation for the development of the bill market, especially the commercial bill market. In the next stage, all kinds of bill market players should firmly grasp this important development opportunity, co-ordinate resources, seek common development, and earnestly promote the innovation, coordination and sustainable development of various businesses in the bill market. to provide more powerful financial support for the transformation and development of the real economy, small and medium-sized enterprises.

"there is a deep way of discounting bills, and banks will not be cheated by sticking them directly.