Original Title: Coordinate, Stabilize Growth, Prevent Risks, and Keep the Capital Market Stable—Interview with Wang Jianjun, Vice Chairman of the China Securities Regulatory Commission |
Since the beginning of this year, under the influence of multiple internal and external factors, the volatility of my country’s capital market has increased, and the stable operation of the market has faced new challenges. The Politburo meeting of the CPC Central Committee held a few days ago called for maintaining the smooth operation of the capital market. Focusing on the recent hot spots in the capital market, Wang Jianjun, vice chairman of the China Securities Regulatory Commission, was interviewed by a reporter from Xinhua News Agency.
Q: Since the beginning of this year, the volatility of the A-share market has increased.What are the considerations of the CSRC in maintaining the stable operation of the capital market?？
A: Since the beginning of this year, the A-share market has experienced relatively large fluctuations, and market confidence has been frustrated, mainly due to the conflict between Russia and Ukraine, the Fed’s interest rate hike, the recent repeated epidemics and the increasing downward pressure on the economy. Internal and external factors are intertwined and resonated. We have also noticed , the market still has a certain overreaction.
In general, the impact of various risk factors on the A-share market is objective, but the impact is controllable, and the stable operation of the market has a solid foundation. From a fundamental point of view, my country’s economy has continued to recover this year. In the recent period, logistics and industrial chains and supply chains are recovering in an orderly and forceful manner. The fundamentals of China’s long-term economic growth have not changed. From a policy perspective, the effect of “steady growth” is accelerating, and positive signals in real estate, platform economy, regulation and guiding the healthy development of capital are conducive to stabilizing expectations in all aspects. From the perspective of the capital market itself, the progress of resumption of work and production of listed companies has accelerated, and their performance has grown steadily. The valuation of the A-share market is generally lower than that of the overseas market, and the dividend yield of the CSI 300 is 2.8%, which is comparable to the yield of the 10-year Treasury bond. More importantly, under the strong leadership of the Party Central Committee and the State Council, in recent years, the comprehensive deepening of capital market reforms has continued to advance, the market ecology has been improved, and the market vitality has been enhanced. toughness. At present, the scale of leveraged funds in the market is limited and the risks are controllable. The public funds are generally subscribed on a net basis, and there is no centralized redemption. We firmly believe that short-term market volatility will not change the long-term positive trend of my country’s capital market.
In the next step, the CSRC will focus on stabilizing expectations, market players, capital, and market behavior, and continue to consolidate the foundation for the smooth operation of the market. The first is to insist on promoting development and stability through reform. Steadily promote the reform of the registration system for stock issuance, strictly control market access, support eligible platform companies to list domestically or overseas, accelerate the launch of the market maker system on the Science and Technology Innovation Board, expand the scope of pilot projects for infrastructure public offering REITs, and study the launch of Beijing Jiaotong University. Indexed and hybrid trading systems. The second is to give full play to the role of the internal stability mechanism of the market. Together with the State-owned Assets Supervision and Administration Commission, the All-China Federation of Industry and Commerce and other departments, we will encourage listed companies to repurchase, increase their holdings by major shareholders, increase dividend distribution, and support listed companies in resuming work and production. Promote the exchange bond market to support the reasonable financing needs of enterprises. Encourage public funds and securities companies to subscribe for their asset management products with their own funds. The third is to actively introduce medium and long-term funds. Promote social security, insurance, bank wealth management and other institutions to increase the proportion of equity investment, and accelerate the implementation of the relevant system for personal pension investment in public funds. The fourth is to maintain the stable operation of the futures market. Work closely with relevant ministries and commissions to strengthen the joint supervision of futures and spot goods, enrich and improve futures varieties, give full play to the role of price discovery and risk management in the futures market, and serve the work of ensuring supply and stabilizing prices. Fifth, strengthen communication and collaboration across ministries and commissions. Regarding policies that may have a significant impact on the capital market, strengthen communication and coordination across ministries and commissions, cooperate in a good demonstration and evaluation, and strive for policy coordination. The sixth is to improve the bottom line plan. Formulate work plans to prevent and resolve risks in key areas of the capital market, and maintain the bottom line of no systemic risks.
There has been no fundamental change in foreign capital flows recently
Q: What is the situation of foreign investment in and out of the capital market recently? How to further promote the high-level opening of the capital market?
A: Since the beginning of this year, due to the unexpected factors such as geopolitical conflicts, the new crown pneumonia epidemic and changes in monetary policies of major economies, the volatility of global cross-border capital flows has increased. Judging from the trading situation of Shanghai and Shenzhen Stock Connect this year, there was a net inflow of foreign capital in January and February, a net outflow in March, and a net inflow in April. Judging from historical experience, it is normal for foreign capital to flow in and out, and there has been no fundamental change in foreign capital flows and transactions recently. Structurally, allocation-type and long-term funds have maintained a net inflow this year. This shows that foreign investors are optimistic regarding the long-term investment value of A-shares, and it also reflects foreign investors’ confidence in the long-term improvement of China’s economy. We believe that more investors will see such an opportunity.
The CSRC will launch more practical measures to expand opening up. First, optimize and expand the interconnection of domestic and overseas capital markets, expand the scope of the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, promptly include ETFs as the target, expand and optimize the Shanghai-London Stock Connect mechanism, and promote the issuance and listing of interconnected depositary receipts by listed companies. The second is to promote the implementation of new regulations on the supervision of overseas listing of enterprises, and support all kinds of qualified enterprises to list overseas in Hong Kong, the United States, Europe and other places. We also welcome qualified overseas companies to list on A-shares. The third is to enrich the product supply of cross-border investment and risk management, promote the implementation of the system for foreign institutional investors to participate in the exchange bond market, and steadily expand the international varieties of commodities and financial futures. The fourth is to strengthen the building of regulatory capacity under the conditions of opening up, deepen cooperation with overseas regulatory authorities, strengthen communication with international investors, and build a good and predictable international environment for the high-level opening of my country’s capital market.
Help listed companies tide over difficulties
Q: What is the current production and operation status of listed companies, and what measures does the CSRC take to support the development of listed companies?
A: Since the beginning of this year, under the complex and ever-changing internal and external environment, listed companies, as the “basic plate” of the real economy, have generally maintained a momentum of stable development. Judging from the first quarterly report of this year, the listed company achieved an operating income of 16.6 trillion yuan, an increase of 11.2% year-on-year, and a net profit of 1.4 trillion yuan, a year-on-year increase of 5.1%.
At the same time, it should be noted that, affected by multiple factors, some listed companies have stopped production and their performance has declined, the cost of listed companies in the middle and lower reaches has risen, some industries have been difficult to recover due to the impact of the epidemic, and the operating difficulties of privately held and small and medium-sized listed companies have increased significantly. The recent meeting of the Political Bureau of the Central Committee, the executive meeting of the State Council, and the meeting of the Finance Committee of the State Council have made a series of important arrangements for stabilizing market players, ensuring smooth logistics, and ensuring the stability of industrial and supply chains. Listed companies are stepping up efforts to resume work and production. is getting better.
In the next step, the China Securities Regulatory Commission will resolutely implement the decisions and arrangements of the Party Central Committee and the State Council to help market entities such as listed companies tide over the difficulties. The first is to thoroughly implement the 18 measures taken by the capital market to support and invigorate the operation of the industrial economy, help stabilize the industrial chain and supply chain, and reduce costs and increase efficiency for listed companies. The second is to implement the 15 measures of the capital market to support the healthy development of small, medium and micro enterprises, enhance the sense of policy acquisition of small, medium and micro enterprises, and support the rescue of small, medium and micro enterprises. The third is to focus on improving the financing environment of private enterprises. Fair treatment of private enterprises’ issuance, listing and refinancing. Improve the bond financing mechanism of private enterprises, launch technologically innovative corporate bonds, give play to the role of market-oriented credit enhancement, facilitate private enterprise bond repurchase financing, and encourage industry institutions to increase investment in private enterprise business. The fourth is to optimize regulatory services, support the Shanghai and Shenzhen Stock Exchanges and the Beijing Stock Exchange to reduce or exempt listed companies’ annual fees and other related fees, so as to reduce the burden on listed companies. Fifth, research and introduce new policy measures to support the accelerated recovery and development of regions and industries severely affected by the epidemic. Support listed companies to overcome the impact of the epidemic through refinancing, mergers and acquisitions, etc., and quickly get out of the predicament.
Support medium and long-term funds to increase the proportion of equity allocation
Q: What further steps does the CSRC take to bring in long-term investors?
A: After hard work, domestic professional institutional investors such as public funds, social security funds, insurance funds, and corporate annuities account for nearly 20% of the stock market value, but they are still significantly lower than those in mature overseas markets. Recently, we held an institutional investor symposium with the China Banking and Insurance Regulatory Commission to solicit opinions and suggestions from social security, banking, insurance and other institutions. We will work with relevant ministries and commissions to actively create conditions and strive to create a market environment where medium and long-term funds are “willing to come and can be retained”. The first is to promptly sort out the policy demands of social security, banks, and insurance institutions, coordinate relevant parties to get through the pain points, and support medium- and long-term funds to increase the proportion of equity allocation. The second is to accelerate the high-quality development of the public fund industry, vigorously develop equity funds, strengthen investment research and risk control capacity building, improve the classification and supervision of fund managers, enrich product types, improve the long-term assessment mechanism, and promote institutional investors to give full play to the capital market. The role of the professional buyer. The third is to conscientiously implement the “Opinions on Promoting the Development of Individual Pensions”, and promptly introduce supporting regulatory rules for individual pension investment in public funds to better serve the needs of pension investment. The fourth is to consolidate the investor protection system and mechanism, strengthen communication with various investors, and crack down on various market violations with “zero tolerance”.
Producer: Wu Huanqing, Zheng Wei
Coordinator: Zhao Xiaohui, Qiu Hongjie, Zhang Weige, Liu Zheng
Text reporter: Liu Hui
Text editors: Liu Zheng, Liu Yangyang
Poster production: Lu Zhe
Video reporters: Wu Siyu, Zhang Shuang
Produced by Xinhua News Agency
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