Recently, the Shanghai local financial regulatory bureau announced that recently, a number of international asset management institutions have actively applied for the pilot of Shanghai qualified overseas limited partner (qflp) and qualified domestic limited partner (qdlp), and are firmly optimistic about the future development of Shanghai international financial center. The medium and long-term plan of International asset management institutions to deeply cultivate the Chinese market has not changed.
The layout trend of the giants of international asset management institutions has always been regarded as a barometer for predicting the economic outlook. Experts said that China's sustained and stable economic recovery, huge market potential, complete industrial chain supply chain and firm determination to promote reform and opening up are the key to attracting foreign investment and casting a "vote of confidence".
foreign funded institutions speed up admission
According to the disclosure of Shanghai local financial supervision bureau, recently, four institutions including Hanling capital, CCB international, CDH investment and Jifu Asia (phase II) have applied to participate in the qflp pilot; BlackRock fund and Anzhong investment applied to participate in the qdlp pilot. At present, the pilot qualifications of six asset management institutions have been approved.
In the context of rising global risk aversion, the Chinese market is still actively deployed. A number of international asset management institutions said that this is out of confidence in the Chinese market. Tang Xiaodong, head of BlackRock China and chairman of BlackRock fund, said BlackRock believes in and is optimistic about the potential of the Chinese market for a long time. The approval of qdlp business this time is a good opportunity for BlackRock to further introduce overseas investment and risk management experience. Hu Ning, CDH investment management partner, said that Chinese assets can not only rely on China's real economy to achieve steady growth, but also play the role of safe haven assets in the global market.
In addition, a number of international asset management institutions planned to increase their business in China and submitted applications for additional pilot quotas. Recently, three qdlp pilot institutions, Credit Suisse investment, pinhao investment and ruiruirui investment, were approved to increase the quota by US $200 million, US $200 million and US $100 million respectively, and the total approved quota reached US $400 million, US $400 million and US $150 million respectively; Hainahua and Xinjing investment two qflp pilot institutions added an investment quota of US $70 million and US $500 million respectively, and the total approved quota reached US $700 million and US $1 billion respectively.
"International asset management institutions actively enter China's capital market, reflecting the trust of relevant institutions in the future development of China's economy and capital market." Li Zhan, chief economist of China Merchants Fund Research Department, said that China's financial opening to the outside world has continued to advance, the cross-border investment policy has been continuously improved, and the channels for foreign investment to participate in the domestic financial market have been continuously optimized, attracting more and more international investors.
Tian Lihui, Dean of the Institute of financial development of Nankai University, believes that the "running" of international asset management institutions means that the internationalization process of China's capital market is constantly advancing and the business environment is continuously optimized; It also means that Shanghai Global Asset Management Center has been recognized by international asset management institutions and the status of Shanghai international financial center has been consolidated; It also means that international asset management institutions can focus on value and be optimistic about the development of the Chinese market for a long time. This will help guide some asset management institutions that lack long-term investment vision to re focus on the future, stabilize market sentiment and promote value return.
firmly optimistic about the Chinese market
At present, the global epidemic is still repeatedly delayed, geopolitical conflicts are intensified, and the situation of transnational investment is still grim. There are worries in the market. Will China's attraction to foreign capital weaken in the future?
It is undeniable that the volatility of global cross-border capital flows has increased since this year. From the trading situation of Shanghai and Shenzhen Stock connect, foreign capital was a net inflow in January and February, a net outflow in March and a net inflow in April. In this regard, Wang Jianjun, vice chairman of the CSRC, said recently that from historical experience, it is normal for foreign capital to enter and leave, and there has been no fundamental change in foreign capital flows and transactions in the near future. Since this year, the net inflow of allocation and long-term funds has maintained, indicating that foreign capital is optimistic about the long-term investment value of a shares.
Looking at the longer time axis, the pace of foreign capital entering the Chinese market is not slowing down, but accelerating. Last year, the net inflow of foreign capital into the A-share market was 384.6 billion yuan, the highest level in the past five years; From 2019 to 2021, China's total foreign capital introduced into the stock market reached 887.4 billion yuan.
"The attraction of China's capital market to foreign investors will continue to increase, and the continuous inflow of foreign capital into China is still the general trend in the future." Li Zhan said that China's rapid recovery from the impact of the epidemic, combined with the advantages of China's large market scale, improved innovation ability and abundant human capital, has a long-term attraction to foreign investment.
China's policies and measures to actively introduce foreign investment have also boosted the confidence of foreign investment in China. Recently, a number of new opening-up measures have been implemented one after another. In April this year, the CSRC issued the opinions on accelerating the high-quality development of the public fund industry, proposing to support high-quality overseas financial institutions with long-term investment willingness in China's capital market to set up fund management companies or expand their shareholding ratio; In December last year, the China Banking and Insurance Regulatory Commission issued the notice on clarifying the measures related to the opening of the insurance intermediary market to the outside world, greatly canceling the access restrictions of foreign insurance brokerage companies and reducing the access threshold of foreign insurance intermediaries.
Under multiple favorable conditions, foreign institutions are firmly optimistic about the Chinese market and remain optimistic about the future trend of a shares. Standard Chartered Bank recently released a report saying that due to policy support and relatively low valuation, Standard Chartered still believes that Chinese stocks may outperform global stocks in the long run. Morgan Stanley also recently released a report that it is still optimistic about a shares. A shares can benefit from potential easing policies in the short term and keep consistent with long-term growth opportunities (it, industry, green economy, etc.).
expanding opening-up without stopping
More and more foreign financial institutions and investors are actively "coming in" to jointly explore and share China's economic vitality. But on the whole, there is still much room for improvement in attracting foreign investment into the market. At present, foreign capital holdings account for about 4.5% of the circulating market value of a shares, while foreign capital in South Korea and Japan accounts for 20% to 30% of the circulating market value of the stock market.
There is still room for policy optimization to attract foreign investment into the market. Li Zhan said that at present, there are still some blocking points and difficulties for foreign-funded institutions to enter the Chinese market. Taking qflp as an example, it still faces some constraints in terms of investment scope and access threshold. Its qualification application involves the pre-approval, industrial and commercial registration, fund access and other procedures of local financial regulatory departments and the constraints of foreign investment industrial policies. At the same time, it is also subject to the regulatory constraints of foreign exchange management departments in terms of amount approval, capital remittance, foreign exchange settlement and investment. In addition, there are some differences in the relevant provisions of qflp policies in various regions, which need to be identified and observed by foreign-funded institutions.
How to further unblock the channels for foreign-funded institutions to enter the Chinese market? Li Zhan believes that we should further open the financial market and enhance the convenience of foreign investment and financing. First, we will continue to simplify and optimize the investment process of foreign investors in the Chinese market, appropriately relax administrative examination and approval, foreign exchange and business controls, reduce the entry threshold, and provide more convenient channels for foreign-funded institutions. Secondly, gradually relax the scope of foreign investment, provide more diversified investment targets, and meet the diversified investment needs of foreign investors. In addition, it can also accelerate the upgrading of industry and consumption and show more valuable investment prospects to global investors.
"Foreign funded institutions need to make efforts in compliance operation, policy understanding and institutional operation to enter the Chinese market." Tian Lihui believes that China's regulatory authorities should also pay attention to the specific problems encountered by foreign-funded institutions in China, optimize the business environment, and further promote regulatory transparency and market internationalization. In addition, we should also analyze the actual entry scale, investment duration and capital flow of foreign capital, do a good job in policy guidance, and constantly improve the quality and level of foreign capital utilization.
With the orderly progress of financial opening up, foreign institutions will embrace more fields in China in the future. Wang Jianjun said that next, the CSRC will launch more practical measures to expand opening-up, including optimizing and expanding the interconnection of domestic and foreign capital markets, broadening the subject scope of Shanghai Hong Kong stock connect and Shenzhen Hong Kong stock connect, and expanding and optimizing the Shanghai London Stock connect mechanism; Enrich the supply of products for cross-border investment and risk management, and steadily expand the international varieties of commodities and financial futures; Strengthen the construction of regulatory capacity under open conditions, 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 China's capital market.
