"New Pattern, New Dynamics- Economic Voice Dialogue economists" Dialogue with Ba Shusong: "Building a system, non-intervention, zero tolerance" to bring about a new ecology?

Beijing, January 22 (CNBC) -- The Central Economic Work Conference stressed the need to improve the governance of financial institutions, promote the healthy development of the capital market, improve the quality of listed companies, and crack down on all kinds of debt evasion. Specially planned "New Pattern, New Power - Economic Voice Dialogue Economist", launched on the 21st: "Building a system, non-intervention, zero tolerance" to bring about what kind of new ecology? ——Dialogue: Ba Shusong, Executive Director of HSBC Institute of Finance, Peking University and Chief Economist of China Banking Association.

<b>Reporter: The reform of the market-oriented allocation of capital factors has further marketized the capital market. One of the most important directions is the change in regulatory policy, how do you interpret it? For example, the regulatory policy of "building a system, non-intervention, and zero tolerance" has formed</b> <b>a</b> <b>new ecology in the capital market? </b>

The idea and policy of "building a system, non-intervention, and zero tolerance" means that China's capital market has reached a new stage in terms of regulatory framework and institutional framework, and the daily market operation should be gradually withdrawn and not intervened. However, for violations, it is necessary to maintain severe punishment and increase the cost of violations. For example, there must be "zero tolerance" for fraudulent issuance, financial fraud, insider trading, and market manipulation in the capital market.

We see that in fact, these three aspects, the focus is on the functional transformation of regulators and driving the transformation of the entire capital market. In this way, the operational efficiency of the entire market will be greatly improved.

This is also directly related to the implementation of our new securities law. For example, the new securities law has significantly increased the cost of violations of laws and regulations, and the fine that was originally punishable by up to 5% of the funds raised for fraudulent issuance has now doubled the amount of funds raised.

In the new Securities Law, the maximum fine for information disclosure violations of listed companies has been increased from the original maximum of 600,000 yuan to 10 million yuan, which has also been greatly improved. It turned out that I often saw various sanctions released, and the top grid was 600,000 yuan, so investors joked that this was "three cups of fine wine". Compared with billions of yuan and tens of billions of yuan of inflated profits, there are still very few. Therefore, the (new securities law) provides a new institutional environment for the marketization of the allocation of financial elements in the capital market in the future. There is a clear system expectation in advance, that is, the system has been built, but the regulatory authorities are not to approve it, so investors themselves should pay close attention to it, analyze it themselves, and improve their judgment ability. If the regulations are violated, the cost of violations must be greatly increased. Therefore, I think that "building a system, non-intervention, zero tolerance" is closely related to the new securities law and the registration system, which is very positive for the entire functional positioning of the regulatory authorities, which can be said to be an important transformation of the regulatory aspects promoted by the registration system.

<b>Reporter: Do you think that in the future, how should we deepen the reform of the capital market in terms of expanding opening up and improving service supply, including serving the real economy? </b>

Ba Shusong: There must be an active capital market support to promote the transformation and upgrading of the industry, promote the transformation of the financing structure, promote the transformation of the asset structure of residents, and also promote the opening up of the capital market. Because China's economy is now in a stage of transformation from high-speed to medium-speed, to achieve the strategic goal of doubling again by 2035, the average annual GDP growth rate should not be less than 4.73%. However, in order to maintain a 5% growth rate in the next 15 years, it is necessary to improve the production efficiency of factors. Promote the improvement of production efficiency by improving the efficiency of financial resource allocation and support the innovation of enterprises.

Relying solely on credit-led financing makes it difficult to support technological progress and technological innovation. In the next 15 years, it is likely that the capital market will be increasingly needed in the entire financing structure. From a macro level, continuing to rely on bank credit to expand social credit and social financing will lead to a continuous increase in the leverage ratio, which is not conducive to the stability of the entire finance.

Now the bank valuation is suppressed, which is directly related to this. If a direct capital market financing and the optimization between banks are formed, it will also have a positive effect on the development of banks and the stability of the entire financial system. So 2020 I think it is a very important start, put it in the context of China's "14th Five-Year Plan" and 2035 development strategy in the future, it should indeed be said that the capital market should play a greater role in the period of strategic opportunities.

Chief planner: Yang Chunyang

Producer: Han Zhifeng

Reporter: Li Shuo, Tang Ming

Anchor: Ma Xiaoyong Yan Wenhui

Source: CCTV Central Radio and Television Central Broadcasting Economic Voice