China-Singapore Jingwei Client, April 19th (Wei Wei) On the 19th, Fang Xinghai, Vice Chairman of the China Securities Regulatory Commission, attended the “Financial Opening and Financial Cooperation” sub-forum of the Boao Forum for Asia 2021, and expressed the confidence of the China Securities Regulatory Commission. In the process of opening up, the stability of the capital market is maintained, and there are measures to prevent the large inflow of foreign capital from causing market instability.

　　Fang Xinghai, Vice Chairman of China Securities Regulatory Commission (second from left) Photo by Wei Wei, Sino-Singapore Jingwei

　　When talking about the results of financial opening, Fang Xinghai said that from the perspective of the capital market, financial opening has benefited China a lot, and it has played a very good role in the development of the Chinese market.

　　Fang Xinghai pointed out that financial opening has two aspects in the capital market. One is the opening of financial institutions, and the other is the opening of overseas capital.

Invest in the capital market through QFII, Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect.

　　Fang Xinghai said, “The opening up of overseas capital started very early, but the large-scale foreign capital entering the Chinese capital market was after the A-shares joined the MSCI index in 2018. Later, it can be seen that foreign capital entering the mainland capital market has increased relatively quickly. As of March 31 this year, foreign ownership of the Chinese stock market accounted for 5%." However, he believes that the 5% ratio is still relatively low, but the growth rate has been relatively fast in recent years.

　　Fang Xinghai said, “With the inflow of foreign capital, everyone has seen that A-shares have operated much more steadily in recent years than before.” He believes that the reason is that the role of foreign capital in market pricing is gradually increasing, and the stock market has a lot of value. Digging, China’s economy is growing very fast. Relatively speaking, there is a lack of institutional organizers that can tap value. Foreign investment has just made up for the shortcomings.

　　After foreign capital comes in, will it affect the stability of China's stock market?

Fang Xinghai pointed out that the international financial situation is also changing, and the China Securities Regulatory Commission attaches great importance to the possibility of large foreign capital inflows and outflows, and will take precautions.

　　Fang Xinghai emphasized that the China Securities Regulatory Commission “can see clearly” for foreign investment in China’s capital market.

He pointed out that there are three types of foreign capital coming in through the "two links": one is overseas retail investors, which will not affect financial stability if the proportion is small; the other is funds for global asset allocation overseas, which is very welcome to us and is also the largest among the holdings. There is another category that comes in through the self-operated form of foreign brokerages, behind which are some hedge funds. We are more concerned about this kind of funds.

　　He said that when the Shenzhen-Hong Kong Stock Connect and Shanghai-Hong Kong Stock Connect were designed from the very beginning, it was stipulated that if a foreign account came in and caused a large fluctuation in the stock market, its trading could be temporarily suspended.

　　"We have the means to prevent the large inflow of foreign capital from causing market instability." Fang Xinghai emphasized that the China Securities Regulatory Commission attaches great importance to security and is confident in maintaining the stability of the capital market during the process of opening up.

(Zhongxin Jingwei APP)

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