China to further open financial markets
China will further reform and open up its financial markets, boost more financial support to the real economy and enhance the adaptability of financial supplies, top officials said on Thursday at the Lujiazui Forum 2019 in Shanghai.
Chinese Vice Premier Liu He said that the country is currently under some external pressures, but these pressures will help improve the country's ability to make independent innovations and speed up economic development.
He said the Chinese government will further launch new “vigorous” reform and opening-up measures in the near future.
For the capital markets, Liu noted more efforts should be made to accelerate the reform of basic financial systems for the issuance, listing and delisting of securities on stock exchanges and the reform of the trading system to make it more market-oriented and accessible.
Also, Liu called for more endeavors to strengthen corporate governance and information disclosure of listed companies and improve their quality, speed up the upgrading of financial intermediary institutions and steadily expand the number and variety of institutional investors.
The central government vowed to unveil more measures to make the financial sector serve the real economy and improve the adaptability of financial supply while preventing financial risks and balancing the strength and rhythm of risk disposal.
In terms of financial regulations, Liu said the country would strengthen the coordination of monetary policy, macro- and micro-prudential policies.
The government will intensify construction of financial infrastructure and foster overall planning and information sharing among different departments.
The country will continue to speed up reform and opening up by facilitating market access to foreign participants, promoting equal competition among domestic and overseas players, and enhancing the protection of intellectual property rights, Liu said.
Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission, spoke highly of Shanghai’s efforts of building itself toward a global financial hub and applauded the achievements “have impressed the whole world”.
He pointed out, however, more work needs to be done to improve the competitiveness of domestic financial institutions due to their lack of variety.
Guo noted the country would further expand financial opening to the outside world and would warmly welcome high-level foreign-funded institutions including banks, insurance companies, securities houses and trust firms. Quality foreign-invested asset managers are welcome to raise yuan funds and make investments in the Chinese capital market.
To better optimize the country’s financial structural reform, the top banking and insurance regulator called for institutions to establish and adhere to customer-centered business philosophy.
“At present, domestic financial institutions are constantly undergoing revolutionary changes in their technological capabilities, but the most important thing to do well in financial services is to always put the interests and concerns of customers first,” Guo emphasized.
He said the country should develop more specialized and personalized financial institutions, build a multi-channel financing market system and establish a complete corporate governance structure with Chinese characteristics.
To keep the financial space in order, supervisors must dare to strictly and resolutely enforce relevant laws and regulations and make violators to be severely punished in a timely manner, the chairman said.
Guo noted the watchdog would be committed to preventing the resurgence of financial products with complex structures and making great efforts to deal with the problem of idle running of funds within the financial system.
During the past two years, the CBIRC has continuously cracked down on market turmoil and lowered enterprises’ financing costs by reducing 13.74 trillion yuan (US$1.98 trillion) of risky assets and shortening the financing chain.
Yi Gang, governor of the People’s Bank of China, said at the forum that Shanghai has made positive progress in constructing itself into an international financial center and the city has boasted a sound financial system with complete market elements, rising influence on the global stage and enhanced competitiveness.
He noted the central bank would continue to lend strong support to make the city an allocation center for yuan-denominated financial assets.
Looking forward, the governor predicted international competition would center on financial technologies and the PBOC would actively support Shanghai’s exploration of applying advanced technologies like artificial intelligence, Big Data and block chain in the financial sector.
To attract and retain talent would be key to that goal and Shanghai should strive to become the place where global financial professionals aspire, Yi added.
Yi Huiman, chairman of the China Securities Regulatory Commission, declared that opening to the outside world would be an unswerving development direction for the capital market and they would launch nine measures in succession to widen foreign investors’ access to the financial industry.
Market entry restrictions for foreign investment in securities would be relaxed, the regulator said. They would also continue to enlarge the opening of the futures market and reduce restrictions on the participation of foreign private equity funds in the Shanghai-Hong Kong Stock Connect scheme and Shenzhen-Hong Kong Stock Connect project.
Channels for overseas institutional investment to enter the bond exchange would also be expanded, Yi said.
CSRC vowed to support a pilot project in Shanghai which would lift the ceiling on foreign investors’ ownership in securities companies and fund management companies and expand the business scope of foreign financial institutions, aiming to fully support the construction of the newly-launched STAR Market.