How can financial institutions seize new opportunities for financial development to better serve the real economy? How to further expand financial opening and enhance financial global competitiveness? At the 2020 China International Finance Annual Forum held in Beijing on September 6, officials from the party and the two sessions gave answers.
On September 6, 2020 China International Finance Annual Forum was held in Beijing. Central Bank Vice Governor Chen Yulu, China Banking Regulatory Commission Vice Chairman Zhou Liang, and China Securities Regulatory Commission Vice Chairman Fang Xinghai attended the speech. Officials of the party and the two committees mentioned the importance of the financial industry, especially the capital market reform and opening up, and put forward corresponding arrangements for the next high-quality development of the financial industry.
Fang Xinghai: my country’s stock market is disappearing
Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said that looking back at the opening of the capital market in the past 30 years, the great feature of my country is that the pace of opening up to the outside world has been steady and there is no impact on the market. This is not an easy task. The China Securities Regulatory Commission will accelerate the opening up of the capital market under the new situation, promote reform through opening up, and promote greater opening through market-oriented reform, so as to form a new pattern of high-level capital market opening to the outside world, and promote the development of a dual cycle of domestic and international economies.
Fang Xinghai said that China’s reform and opening up practice shows that opening to the outside world is an important driving force for the sustained and rapid development of my country’s economy. The opening of the capital market promotes the development and improvement of the capital market itself, and also promotes the high-quality development of the financial industry and the entire economy. While realizing investment appreciation, foreign investors played a catalytic role in guiding value investment concepts, enhancing market transparency, and improving corporate governance. These foreign investors also shared the fruits of China’s reform and opening up in my country’s capital market, so the capital market was opened to the outside world. It is a win-win move.
Opening to the outside world has brought many positive effects on the high-quality development of my country’s capital market. Fang Xinghai said that opening to the outside world has effectively improved the structure of the capital market. A prominent problem in my country’s financial industry is that the proportion of direct financing, especially equity financing, is low. A large amount of savings is converted into investment in the form of debt, which raises the macro leverage ratio and increases The risks of our country’s financial system. Enlarging the capital market by opening up and developing and significantly increasing the proportion of equity financing is of great significance to optimizing the financial structure and improving the efficiency of financial supply. Especially in the stage of innovation-driven development, more equity investment that can absorb risks is needed to cultivate and support innovative companies .
The continuous increase in equity financing also reflects the continuous enhancement of the functioning of the capital market. Fang Xinghai said that opening to the outside world has effectively promoted the improvement of the operating quality of the capital market, the concept of value investment has been consolidated, investment behavior has become more rational, and market valuations have become more reasonable. The market for IPOs is disappearing, and a more rational market provides a basis for normalized IPO issuance and investor protection.
As of September 3 this year, foreign investors have held 2.01 trillion yuan of stocks in my country’s stock market through the Shanghai-Shenzhen-Hong Kong Stock Connect, and their share of the market value of A-shares is 3.28%. If QFII and RQFII holdings are added, all foreign investors The proportion of holdings of the value of my country's circulating stock market is 4.69%. Fang Xinghai said that compared with the stock market in Japan, South Korea and other stock markets, where foreign holdings accounted for more than 30%, the share of foreign holdings in my country’s capital market is still very small, and there is still a large amount of foreign capital in the opening to the outside world. potential.
Fang Xinghai stated that the China Securities Regulatory Commission will accelerate the opening up of the capital market under the new situation, promote reforms through opening up, and promote greater opening up through market-oriented reforms, to form a new pattern of high-level capital market opening to the outside world, and to promote the domestic and international economic cycle development of.
First, continue to improve the product system of opening to the outside world, further expand the investment scope and targets of Shanghai and Shenzhen Stock Connect, broaden the interconnection of ETFs, facilitate the allocation of equity ETFs and RMB bond assets by overseas institutions, continue to increase the opening of the commodity futures market, and expand the scope of specific products . Create conditions in a timely manner to provide good risk management tools for foreign institutional investors to invest in my country's stock and bond markets.
The second is to continue to promote the institutional opening of the capital market. Promote the release and implementation of the revised QFII and RQFII system rules as soon as possible, continue to improve and deepen the domestic and foreign market interconnection mechanism, enhance the investment convenience of international funds, increase the willingness and confidence of international investors to invest in the Chinese capital market, and further smooth the international and domestic market The two market elements and resources flow freely and orderly, forming complementary advantages and promoting a good circulation situation.
The third is to continuously improve the level of two-way opening up of the securities and futures industry. Continue to implement the policy of relaxing restrictions on foreign shareholding in the securities, fund and futures industry, encourage overseas high-quality securities, fund and futures financial institutions to do business in China, support domestic business institutions to go global, and promote ecological improvement of the capital market.
Fourth is to actively participate in international financial governance and timely prevent and resolve cross-border capital market risks. Strengthen communication and policy coordination with overseas capital market regulators, strengthen cooperation in audit supervision of cross-border listed companies, severely crack down on financial fraud, jointly safeguard the legitimate rights and interests of investors in various countries, continuously improve their own regulatory standards, and improve cross-border capital monitoring and risk warning Mechanisms to prevent and respond to imported risks, and continuously improve the vitality and resilience of capital market operations in an open environment.
Chen Yulu: Promoting the institutional and systematic opening of the financial industry
Chen Yulu, deputy governor of the central bank, said that my country's modern financial system is gradually improving and its ability to serve the real economy has been significantly enhanced. China is steadily moving from a financial power to a financial power. The People's Bank of China needs to establish and improve a modern central bank system. The Fourth Plenary Session of the 19th Central Committee made important arrangements for building a modern central bank system from the height of advancing the modernization of the national governance system and governance capabilities. The fundamental mission of modern central banks is to maintain currency stability and financial stability, and to provide a long-term stable monetary and financial environment for the development of the real economy and financial services. The basic attributes of modern credit currency determine the need for a systematic institutional arrangement. It is necessary to play the positive role of credit currency in flexibly regulating counter-cyclical adjustments to support economic development, and to prevent the economic and financial consequences that may be caused by excessive currency issuance. .
"Since this year, in the face of the sudden impact of the new crown pneumonia epidemic and the complex and severe domestic and foreign situation, the central bank has decisively increased its monetary policy counter-cyclical adjustments, maintained the stability of the financial market, and provided strong support for the rapid recovery of the national economy. It also provides good practical experience for building a modern central bank system. From the current results, compared with other major economies, China’s countercyclical financial regulation has maintained stable prices and basically stable asset prices this year. At the same time, it also provides an effective and stable monetary and financial environment for continuing to fight against major financial risks and maintain financial stability." Chen Yulu said.
While serving the domestic economy well, China’s financial industry and China’s financial service industry are also constantly pursuing higher levels of opening up. Chen Yulu said that on the one hand, we have lifted restrictions on foreign ownership in banking, securities, futures, and fund management, and reduced restrictions on shareholder qualifications such as asset scale and operating life. National treatment for foreign investment is granted in areas such as payment and settlement, and the international integration of accounting, taxation and transaction systems is promoted. In the negative list of special management measures for foreign investment access released this year, the negative list of financial industry access has been officially cleared. At present, the above-mentioned measures have achieved initial results, and more foreign investment and foreign institutions are entering my country’s financial industry in an orderly manner. market.
On the other hand, we are also actively participating in international financial governance to promote the renminbi to become a better international reserve currency. The renminbi is currently the world’s fifth largest payment currency and official foreign exchange reserve currency. More than 70 central banks around the world have made official reserves of the renminbi. At the same time, the international appeal of renminbi financial assets has become stronger and stronger. As of the end of July, foreign institutions and individuals The balance of RMB financial assets held in China has grown to 7.74 trillion, a year-on-year increase of 37%. With the continuous deepening and expansion of the reform and opening up of China's financial service industry, the future RMB can carry greater international responsibilities.
In the reform and opening up of the financial service industry, the application of new science and technology is a key factor that cannot be ignored. Chen Yulu said that the first financial revolution characterized by modern commercial banks provided financial support for the first industrial revolution, and the second financial revolution characterized by modern investment banks reconstructed the foundation of capital for the second industrial revolution. , The third financial revolution characterized by the venture capital system created a new driving force for the third industrial revolution. The current fourth industrial revolution has given the financial service industry new historical responsibilities, and the integrated innovation of the financial service industry led by financial technology will become a prominent feature of the fourth financial revolution.
"Overall, China's financial technology has shown a good situation of rapid development, good growth quality, and continuous optimization of structure in recent years. It is driving profound changes in financial formats, financial products and traditional financial development models. However, the development of financial technology has not The problems of balance, insufficiency, and irregularities are still prominent. There is still a lot of room for improvement in the digitization of the financial system and the digitization of inclusive finance, and consumers continue to put forward higher requirements for the quality and stability of financial services." Chen Yulu Called.
Chen Yulu said that the central bank issued a financial technology development plan last year, guiding the financial industry to use advanced technology to improve quality and efficiency, and it has achieved initial results. At present, the central bank is actively constructing a regulatory technology application framework, improving the basic regulatory system, striving to create a better environment for the development of financial technology, and promoting the modernization of the financial service industry.
Under the construction of a new development pattern of mutual promotion of domestic and international double cycles, this puts forward higher requirements for high-quality financial development. Chen Yulu said that the financial industry must serve the new development pattern, strengthen macro policy coordination, improve the monetary policy framework and base currency release mechanism that are compatible with the construction of a modern central bank system, explore the establishment of a macro-prudential policy framework for matrix management, and gradually expand The coverage of macro-prudential policies, unswervingly promote structural reforms on the financial supply side, improve a modern financial system that is highly adaptable, competitive, and inclusive, build a higher-level new open financial system, and promote the financial industry Towards an institutional and systematic opening based on access to the national citizenship plus a negative list, to provide high-level financial support for key areas and key links of the new dual-cycle development pattern.
Zhou Liang: Put development direct financing in a more prominent position
Zhou Liang, vice chairman of the China Banking and Insurance Regulatory Commission, said that finance is the blood of the real economy and plays a vital role in smoothing the circulation of the national economy. In the next step, the China Banking and Insurance Regulatory Commission will deepen the supply-side structural reforms to better meet the financial needs of the real economy and the people, and promote the high-quality development of the banking and insurance industries.
Zhou Liang said that the profound changes in the internal and external environment have brought a series of new opportunities as well as a series of new challenges. We must accurately identify, respond scientifically, and actively seek change. Taking the domestic cycle as the main body, it is by no means a closed door to operate, but by leveraging the potential of domestic demand to better connect the domestic and international markets and achieve stronger and sustainable development.
Regarding how to better promote the high-quality development of the banking and insurance industries in the next step, Zhou Liang proposed the following four aspects:
One is to strive to improve the quality and efficiency of serving the real economy, do everything possible to reduce the financing costs of enterprises, explore emergency loans and emergency financing mechanisms, and promote the financial system to reasonably transfer 1.5 trillion yuan to various enterprises this year. Guide financial institutions to actively meet the financial needs of advanced manufacturing and strategic emerging industries. Support the development of foreign trade and foreign-funded enterprises and strengthen financial services for private and small and micro enterprises. Promote the digital transformation of financial institutions, realize the deep integration of finance and technology, and use the Internet, blockchain, big data, and artificial intelligence technologies to improve service efficiency.
The second is to resolutely prevent and resolve financial risks. Plan ahead, take precautions, and urge banks to replenish capital through multiple channels and implement asset quality classification. Provision is increased in accordance with the expected credit loss method to increase the disposition of non-performing assets. It is estimated that the banking industry will dispose of non-performing loans of 3.4 trillion yuan this year. Improve the long-term mechanism of risk monitoring, early warning and prevention and control, and achieve early identification, early warning and early disposal of various risks. Strictly regulate shareholder equity management and establish effective incentive and restraint mechanisms. Consolidate the three responsibilities, namely, consolidate the responsibilities of financial institutions, local governments, and financial management departments. Properly dispose of high-risk small and medium financial institutions. Strictly follow the positioning of "housing to live without speculation" to prevent excessive financialization of the real estate market, and prevent the risk of shadow banking from rebounding.
The third is to deepen the structural reform of the financial supply side, and build a multi-level, wide-coverage, and differentiated financial market system and product system. Guide large banks to focus on services and improve comprehensive service levels; deepen policy bank reforms to realize sub-ledger management and classified accounting; deepen the reform and reorganization of small and medium-sized financial institutions; supervise urban commercial banks and rural small and medium-sized financial institutions to improve internal governance and serve local economic development . Give full play to the guarantee function of insurance and cultivate the unique advantages of non-bank financial institutions. Put the development of direct financing in a more prominent position, vigorously develop the third pillar of pension insurance, and effectively guide various medium and long-term funds such as financial management and insurance funds to enter the capital market.
Fourth is to promote a higher level of opening up of the banking and insurance industries. Since 2018, the China Banking and Insurance Regulatory Commission has implemented 34 measures to expand the opening up of the bancassurance industry, and the current revision of relevant laws and regulations has been basically completed. In the past two years, the China Banking and Insurance Regulatory Commission has approved foreign banks and foreign insurance companies to establish nearly 100 institutions of various types in China. The China Banking and Insurance Regulatory Commission will continue to uphold the principles of marketization, legalization, and internationalization, implement a consistent, open and transparent policy environment internally and externally, further implement the measures that have been introduced, and introduce more professional and distinctive foreign financial institutions to China .
According to a report on the Bloomberg News website on September 6, Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said that China will accelerate the opening of capital markets and deepen reforms to attract more foreign in...
How can financial institutions seize new opportunities for financial development to better serve the real economy? How to further expand financial opening and enhance financial global competitiveness? At the 2020 China International Finance Annual For...
Private equity investment funds mainly invest in the equity of unlisted companies, with a view to exit through other methods such as IPOs or mergers and acquisitions to achieve capital appreciation. The investment period of its products is relatively ...