At the Boao Forum for Asia Annual Conference 2022 "When China's Capital Markets Are Opened up", Fang Xinghai, Vice Chairman of the China Securities Regulatory Commission, responded to hot issues of market concern.
Among them, when talking about the decline of Chinese stocks, he revealed that the negotiations on the audit supervision of Chinese stocks were very smooth and he was confident of reaching a cooperation agreement. Regarding the inflow of foreign capital, he said that the net inflow of foreign capital this year is considerable, and foreign capital has long-term and lasting confidence in China. "Recently, some IPOs have fallen below the issue price, which is not that there are too many IPOs, but that the pricing is more appropriate. It is believed that more foreign investment in the Chinese market will further enhance the market's pricing and other aspects of the ability. ”
Regarding the reform of the registration system, he believes that the CSRC should spend more efforts on the fairness, transparency, truthfulness, accuracy and integrity of the market. In addition, with regard to the april 20 vote of the People's Congress to pass the Futures and Derivatives Law of the People's Republic of China, Fang Xinghai believes that there is a law to follow in the future opening up of China's futures market.
Talk about the decline in Chinese stocks
"The negotiations on the audit supervision of Chinese stocks have been very smooth and there is confidence in reaching a cooperation agreement"
Fang Xinghai said that the decline in Chinese stocks is mainly due to the sino-US audit and regulatory cooperation. "After the new chairman of the U.S. Securities and Futures Commission last year, including the chairman of the PCAOB (Accounting Oversight Committee for Public Companies in the United States), our negotiations (in terms of the audit supervision of Chinese stocks) are progressing very smoothly, and now we are basically negotiating on video every other week, and the details are all landed, and I am very confident that a cooperation agreement will be reached in the near future, so that PCAOB can reasonably and legally carry out inspections of accounting firms in China, and I believe that this uncertainty will soon be removed. This will be good news for China stocks. ”
Talk about bringing in foreign investment
"The net inflow of foreign capital this year is considerable, and foreign investment has long-term and lasting confidence in China."
When talking about the opening up of China's capital market, Fang Xinghai said that "bringing in" is mainly in two aspects, one is to bring in foreign capital and invest in our stock market and futures market, including the bond market. The second is to introduce leading foreign capital, financial institutions, especially securities companies and futures companies, to the market to provide better services. "Whether 'bringing in' can be successful and how it is done depends to a large extent on the fundamentals of China's economy, and the fundamentals of China's current economic development will not change." In addition to the fundamentals, how well a country is introduced depends on its opening up policy, China's confidence and will to reform and open up will not waver, and China will expand its high-level opening up. ”
Fang Xinghai said that there are two aspects specific to "bringing in", and the introduction of foreign capital has made great progress, with a total of 887.4 billion yuan of foreign capital introduced to the stock market from 2019 to 2021. "At present, the proportion of foreign holdings in the current market value of A-shares is very low, only about 4.5%. Foreign capital in South Korea and Japan accounts for 20 to 30 percent of the current market value of the stock market, and China still has a lot of room to rise. ”
Fang Xinghai said that the net inflow of foreign capital this year is also considerable, and foreign capital has long-term and lasting confidence in China. "I have dealt with foreign capital a lot in recent years, foreign investment in China has a familiar process, sometimes do not understand, sometimes out of what policy it panics to leave, I think it does not matter if it leaves for a while, it will come back after a while." The key is our own policy, China's confidence and will to reform and opening up will not waver, under such a policy, foreign investment will still come back. Fang Xinghai said.
It is reported that in terms of introducing institutions, the China Securities Regulatory Commission has completely relaxed the restrictions on foreign ownership in advance. At present, a total of 12 leading overseas securities, futures and fund companies have obtained 100% shareholding or holding licenses for domestic institutions, 10 have opened and two are preparing to open.
Talk about the IPO falling below the issue price
"It's not that there are too many IPOs, but to further improve pricing power"
Fang Xinghai also stressed at the forum that it is also very important to introduce leading institutions. Our ability to serve different types of investors and respond to different market challenges can be further enhanced. "For example, the pricing ability of IPOs can be further improved, and the introduction of some more experienced international institutions will help improve the quality of the market." Recently, people have said that some IPOs have fallen below the issue price, which is not that there are too many IPOs, but that the pricing should be more appropriate. In order to get the market to recognize, it is necessary to further improve the pricing power. ”
Fang Xinghai also said that he believes that more foreign capital enters the market, especially after more long-term institutional investors come in and international leading institutions come in further, through the provision of services, it will further enhance the market's pricing, investment level, financing and margin capabilities, making the market more resilient and more dynamic.
Talk about the reform of the registration system
"In terms of market fairness, transparency, truthfulness, accuracy and completeness, the CSRC should spend more efforts"
Fang Xinghai also shared some views on the reform of the registration system at the forum.
In his view, the reform of the registration system is a work of the development of the entire capital market, which essentially makes the market more market-oriented in terms of issuance and pricing, and the investors themselves make decisions, the CSRC is responsible for the quality of information disclosure, requiring information disclosure to be true, accurate and complete, and pricing, whether to buy stocks is mainly judged by investors themselves.
"Where is the focus of regulation? I think it may be that the csrc will have to spend more effort on the fairness, transparency, truthfulness, accuracy and integrity of the market. If the registration system reform is done well, this market will be more active and more resilient, and the market size will be larger, providing a better basis for attracting more foreign funds to come in. Fang Xinghai said.
On the Futures and Derivatives Act
"In the future, there is a law to follow for the opening up of China's futures market"
According to Xinhua News Agency, the 34th session of the 13th National People's Congress Standing Committee voted to pass the Futures and Derivatives Law of the People's Republic of China on April 20. The law will come into force on August 1, 2022.
At the top of the forum, Xinghai said that there is a special chapter on the opening of the futures industry in the newly passed Futures and Derivatives Law, "For domestic futures companies to practice abroad, overseas futures companies or investors to carry out futures market business in China, we have very clear provisions, in the future the opening of China's futures market has a law to follow." For example, if foreign investors want to invest in China's futures market, we stipulate that they must enter the futures market through enterprises that have futures brokerage business in China, and if foreign investors want to do this business, they must first obtain the qualification to practice at the CSRC. ”
Fang Xinghai also said that Chinese investors are also encouraged to invest abroad. "But there must be a reasonable way to do business abroad through Chinese futures companies, including cooperation with other regulators." Among all the financial laws, the Futures Law has the clearest and best enforcement provisions on domestic and overseas transactions. Fang Xinghai said.
Beijing News shell financial reporter Hou Runfang
Edited by Wang Jinyu Proofreader Zhao Lin