"Foreign capital has long-term and lasting confidence in the Chinese market. The inflow of foreign capital promotes the further improvement of market services, market pricing and investment level, making the market more resilient and dynamic." At the "opening of China's capital market" sub forum of the 2022 annual meeting of Boao Forum for Asia held recently, Fang Xinghai, vice chairman of China Securities Regulatory Commission, said that the entry of foreign capital, especially the entry of long-term institutional investors and international leading institutions, will further improve the ability of margin trading in China's capital market.
As China's financial opening door is becoming larger and larger, "we should see both short-term challenges and long-term opportunities" has become the consensus of people in the industry. At this forum, the guests actively looked forward to the opening prospect of China's financial system.
In Fang Xinghai's view, the opening of the capital market includes "bringing in" and "going out". Among them, the success of "bringing in" largely depends on economic fundamentals and opening-up policies. "Our economic potential is far from being realized, and the fundamentals of economic development will not change. In addition, how well a country" brings in "depends on its opening-up policy. The direction and methods for China to expand high-level opening-up are very clear."
Fang Xinghai said that "bringing in" includes not only bringing in foreign capital to attract it to invest in the stock market, futures market and bond market, but also introducing leading foreign financial institutions into the market to provide better services. According to the data, from 2019 to 2021, a total of 887.4 billion yuan of foreign capital was introduced into China's stock market. At present, foreign ownership accounts for about 4.5% of the circulating market value of a shares. Compared with the proportion of foreign capital in South Korea and Japan accounting for 20% ~ 30% of the circulating market value of the stock market, there is still a lot of room for growth in the Chinese market. With the China Securities Regulatory Commission fully liberalizing the restrictions on the proportion of foreign shares in advance, at present, 12 leading overseas securities, futures and fund companies have obtained 100% shareholding or holding licenses of domestic institutions.
In terms of the depth and breadth of market development, Fang Xinghai believes that China needs to further improve in serving different investors and responding to market challenges. "For example, in terms of market making and IPO pricing, the introduction of international experienced institutions is helpful to improve the market quality."
With a number of leading international professional institutions in wealth management, commercial insurance and credit rating entering the Chinese market through sole proprietorship, holding or equity participation, the enthusiasm of foreign institutions to invest in China's financial market has increased significantly, and the new pattern of Bank Of China Limited(601988) insurance industry's wider, wider and deeper comprehensive opening-up has accelerated.
Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission, said that in the next step, the China Banking and Insurance Regulatory Commission will increase efforts to promote the opening of the banking and insurance industry from five aspects: paying more attention to institutional opening, paying more attention to the quality and efficiency of opening, paying more attention to fairness and transparency, paying more attention to the concept of opening and paying more attention to the rhythm and safety of opening.
Overall opening-up and security are important issues in the opening of financial markets. In this regard, Lu Lei, deputy director of the State Administration of foreign exchange, said frankly that in the process of opening up, from managers to market regulators, as well as economic entities themselves, we should constantly improve the ability of risk control, which is also the foundation behind higher-level opening-up.
"For the next step to improve the management of enterprises' external creditor's rights, we dare to cancel the prior approval of domestic entities borrowing foreign debt (except local governments)." Lu Lei said that at the same time, it will continue to improve the centralized operation and business management of the company's cross-border funds, making it more convenient for enterprises to carry out business.
He also said that the basic starting point of channel expansion of cross-border securities or cross-border financial markets is to serve the real economy. In the near future, the safe will work with relevant departments to unify the capital management rules for foreign investment in the domestic bond market, optimize the domestic issuance of bonds by overseas institutions, and further improve the opening of the bond market to the outside world.
