Securities regulator pledges further opening-up of capital market
More financial institutions, talent to be attracted to China: official
Published: Nov 06, 2022 07:56 PM
China Securities Regulatory Commission (CSRC) in Beijing Photo:VCG

China Securities Regulatory Commission (CSRC) in Beijing Photo:VCG

China's securities regulator pledged on Saturday to further push institutional opening-up of the capital market, with efforts to lure more international financial institutions and talent to the Chinese capital market while facilitating overseas listings of Chinese companies, a senior official said.

Experts said China's unwavering commitment to expanding high-quality financial opening-up will help integrate the country's finance sector with the world market, bring rising opportunities for global companies and investors, and most importantly inject stability and confidence into the world economy.

"We will continue to improve relevant institutional arrangements to further facilitate cross-border investment by domestic and foreign investors and better support cross-border financing of companies," Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), said in remarks delivered at the 5th Hongqiao International Economic Forum, being held to accompany the ongoing China International Import Expo (CIIE).

Fang said that overseas financial institutions are welcome to set up businesses in China. China has become the world's second largest equities market in terms of market valuations, offering solid fundamentals for long-term stable development, he said, noting that the regulator will ramp up enhancing improvement of institutional frameworks to attract more high-quality international institutions and talent.

In addition, Fang pointed out that the CSRC will support enterprises to go public overseas in line with the improvement of market connectivity programs like issues of global depositary receipts and Chinese depositary receipts.

Fang's remarks send a strong signal of China bent on continuously pushing forward capital market opening-up, Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Sunday.

Thanks to the country's growing market size and sound liquidity conditions, China is among the world's most attractive capital markets, Xi said.

"On top of the stock connect system between the Chinese mainland and Hong Kong stock markets as well as the QFII program, more work will be done to make it more convenient for overseas investors to access the mainland market," he said.

Fang reiterated plans to widen the scope of the Stock Connect program in strengthening cooperation between the Chinese mainland and Hong Kong capital markets. The cross-boundary investment channel that connects the Shanghai, Shenzhen and Hong Kong exchanges helps investors in one market to trade shares in the others.

And, it has become increasingly convenient for foreign-funded enterprises to establish businesses in China over recent years.

The country has scrapped the limitations on the ratio of foreign shareholdings in securities and fund management firms, giving the green light to the establishment of 12 foreign-controlled or wholly owned joint venture securities firms by Goldman Sachs, JP Morgan, Nomura and others.

Meanwhile, the branches of three foreign banks, including Standard Chartered, have obtained licenses in the mainland to provide custody services to domestic funds.

"Amid global uncertainties, China has displayed firm determination to push opening-up that will inject stability and confidence into the global economy," Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Sunday.

As for potential policy measures to further boost stock market opening-up, Dong said that regulator has done a lot and treats domestic and foreign capital equally. In the first 10 months of the year, 289 IPOs were passed on the two major bourses in Shanghai and Shenzhen, official data showed.

As a foreign financial firm that has attended the CIIE for the fifth year in a row, Standard Chartered showed optimism regarding China's long-term development and would continue its investment in the mainland market.

"The opening of the CIIE event showcases China's determination to open up and its sincerity of sharing development opportunities with the world. We plan to invest $300 million by 2024 into our business in the mainland to assist our clients seize opportunities brought about by China's development," said Jose Vinals chairman of Standard Chartered.