In the 20 years since China’s entry into the WTO, China’s capital market has been opening up to the outside world at a high level and has been steadily advancing
Twenty years after China's entry into the WTO, the foreign shareholding ratio and national treatment of business scope in China's securities, fund and futures industry have been fully implemented.
China's capital market is a product of reform and opening up.
Since China's accession to the World Trade Organization (WTO) on December 11, 2001, the capital market has experienced two decades of reform and opening up under the new situation.
"The global capital market can have today's development situation, mainly relying on open cooperation, and the future still needs to deepen open cooperation." Under the general background, the capital markets of various countries and regions have learned from each other and merged with each other, and they have become an inseparable and interdependent whole.
The institutional two-way opening up of the capital market is a microcosm of China's unswerving reform and opening up.
At present, the China Securities Regulatory Commission is studying and launching relevant measures to further expand opening up in accordance with the country’s new round of high-level opening up to the outside world, to provide more fair, efficient and convenient services for foreign institutions and investors to participate in China’s capital market, and continue to steadily Promote the high-level opening of the capital market.
Fully liberalize industry access
In 2020, the China Securities Regulatory Commission fully liberalized the restrictions on the foreign shareholding ratio of securities, futures and fund management companies in advance, and foreign-funded institutions have achieved national treatment in terms of business scope and regulatory requirements.
At present, many internationally renowned institutions have accelerated their investment and business development in China.
Eleven foreign-owned or wholly-owned securities, fund and futures companies, including JPMorgan Chase, UBS Securities, Goldman Sachs Gao Hua, and Fidelity, have been approved one after another.
The new Qualified Foreign Investor (QFII) regulations implemented in November 2020 have further lowered the entry barrier for foreign investors, expanded the scope of investment, and made foreign investment operations more convenient.
In addition, the interconnection mechanism is an innovative mechanism for capital market opening.
In recent years, the Shanghai-Shenzhen-Hong Kong Stock Connect mechanism has continued to be optimized, the Shanghai-London Stock Connect mechanism has been operating steadily, and China-Japan ETF interoperable products have run smoothly. Shenzhen-Hong Kong and Shanghai-Hong Kong ETF interoperable products have been officially launched. The proportion of A-shares included in internationally renowned indexes has gradually increased. Overseas investment The scope and convenience for participants to participate in A-share investment has increased significantly.
In the futures market, the internationalization of products is advancing steadily, and the internationalization of commodity futures options continues to increase.
Recently, the Hong Kong Securities Regulatory Commission approved the Hong Kong Stock Exchange to launch A-share index futures, which provides a good risk management tool for foreign investors to invest in the A-share market.
The opening of my country's capital market has shown the characteristic of gradual and orderly progress.
At the initial stage of opening up, the main focus was on raising funds in overseas capital markets.
Beginning in the 1980s, my country began to issue government and corporate bonds in the international capital market to raise funds. In the 1990s, my country explored new ways of attracting capital by issuing foreign stocks and establishing funds overseas to invest in my country’s industrial sector.
After the mid-1990s, marked by the establishment of the China International Finance Corporation, foreign capital began to participate in the establishment of securities institutions or branches in my country.
After China joined the WTO at the end of 2001, the opening up of the capital market has entered a brand new stage.
According to the framework of the WTO agreement, foreign investors began to participate in securities companies and fund management companies at the end of 2002.
In the process of my country's capital market opening to the outside world, my country has always been more cautious about foreign investment in domestic capital markets.
On November 5, 2002, with the approval of the State Council, the China Securities Regulatory Commission and the People's Bank of China jointly promulgated the Interim Measures for the Administration of Domestic Securities Investment by Qualified Foreign Institutional Investors, introducing QFII investment in my country's capital market.
The implementation of the QFII system marks a new step in the opening up of China's capital accounts.
In January 2004, the "Several Opinions of the State Council on Promoting the Further Reform, Opening, and Stable Development of my country's Capital Market" was announced, which made specific arrangements for promoting the reform, opening up and stable development of the capital market, insisting on gradual and orderly progress, and continuously improving the level of opening up.
At the beginning of WTO accession, both regulatory authorities and financial practitioners had doubts about the market competition brought about by opening up, but the industry soon realized that opening up is an inevitable trend. Faced with the huge environment for survival and development of the industry brought about by accession to the WTO Only when we face changes with a more proactive, open and optimistic attitude, and at the same time enhance our competitiveness as soon as possible, can we be invincible in the new competitive environment.
In the context of China's accession to the WTO, not only financial institutions must enhance their market competitiveness, but the securities market must also enhance their international competitiveness.
Zhou Zhengqing, a member of the Standing Committee of the National People's Congress at the time, said at the time that an internationally competitive securities market requires a relatively complete securities legal system. The competition in the global securities market is actually the competition in the legal environment.
In order to adapt to the new stage of market development and regulatory requirements, the Securities Law and the Company Law were revised and approved at the end of 2005.
In fact, after China's accession to the WTO, it not only earnestly fulfilled its commitment to opening up the securities industry, but also proactively adopted a series of policy measures to open up the capital market.
For example, it has proactively implemented a series of open policies such as the Qualified Foreign Institutional Investor (QFII) system and the Qualified Domestic Institutional Investor (QDII) system.
Opening up to promote reform, a 90 trillion market
China's capital market has grown into the second largest market in the world.
From the domestic market, as of December 9, the total market value of A shares exceeded 90 trillion yuan, and the number of listed companies exceeded 4,600.
Commodity futures and bond markets are also among the top in the world.
In 2013, the reform of the registration system for stock issuance was officially launched. After more than eight years of hard work, the current IPO registration system has been piloted on the Science and Technology Innovation Board, the Growth Enterprise Market and the Beijing Stock Exchange. The reform of the registration system for the Shanghai and Shenzhen Main Board is just around the corner.
Under the registration system, companies can choose their own "threshold" among the many listing access standards. At the same time, the gradual market-oriented issuance, pricing, trading, and delisting rules also provide a path for the company to advance and retreat in an orderly manner.
Taking the data from January to August 2021 as an example, there are a total of 333 companies IPO and refinancing in the country for a total of 884.9 billion yuan; a total of 16 domestic companies have realized H-share overseas financing of approximately HK$94.2 billion.
"Opening to the outside world has strongly supported the development of domestic and foreign market financing by Chinese enterprises. Opening to the outside world has improved the inclusiveness of my country's capital market system, promoted the vitality and development of the market, and reduced corporate financing costs." Fang Xinghai, vice chairman of the China Securities Regulatory Commission, had previously Evaluation said.
From a market perspective, foreign capital pays close attention to and recognizes the ever-opening Chinese capital market, and maintains a steady flow into the A-share market.
From January to October 2021, foreign investors have accumulated a net inflow of approximately 240.976 billion yuan through channels such as QFII and Shanghai-Shenzhen Stock Connect.
As of the end of October 2021, the market value of A shares held by foreign investors was 3.67 trillion yuan, accounting for approximately 4.97%.
In terms of commodity futures, crude oil futures were listed on the Shanghai International Energy Exchange in 2018 and introduced overseas traders.
Over the past three years, the market has been operating generally smoothly, the scale of transaction holdings has increased, overseas participation and investor structure have continued to be optimized, market functions have been gradually brought into play, and international influence has continued to increase. It has become the third-largest crude oil futures in global trading volume.
According to data from the China Securities Regulatory Commission, from January to August 2021, a total of 28,779,800 lots (one-sided) were traded, with a total transaction value of 11.75 trillion yuan. Among them, overseas customers had a total of 14.429,600 lots (two-sided), accounting for 25.07%.
Fang Xinghai once said that under extreme market conditions such as the sharp fluctuations in international oil prices in 2020, the "negative oil prices" in WTI crude oil futures, and the sharp fluctuations in international commodity prices in 2021, Shanghai crude oil futures are operating smoothly, and the system design, risk management and emergency response capabilities have withstood Having survived the test, he showed strong resilience and self-repair ability.
Unwavering direction
After two decades of development, China's capital market has long been completely reborn in terms of scale and quality compared to the beginning of WTO accession.
The current global epidemic is still continuing, and the world economic and financial landscape is profoundly evolving. However, it is still the mainstream consensus to adhere to open cooperation.
The China Securities Regulatory Commission has stated on many occasions that it will continue to unswervingly expand opening up, coordinate development and security, launch more pragmatic opening-up measures, and serve the construction of a high-level open economic system.
Yi Huiman introduced in September this year that the China Securities Regulatory Commission is studying and launching relevant measures to further expand opening up in accordance with the country's new round of high-level opening up to the outside world.
Author: Du Qingqing