Original title: The high-level two-way opening of the capital market was promoted in an orderly manner, and the accumulated net inflow of northbound funds during the year was 42.8 billion yuan
Our reporter Xing Meng
On January 17, the 2022 system work conference held by the China Securities Regulatory Commission clearly pointed out that it is necessary to coordinate opening and security, and unswervingly promote institutional opening. Steadily expand the high-level two-way opening of markets, institutions and products, and deepen the interconnection of domestic and foreign markets.
Looking back on 2021, the opening up of the capital market has achieved remarkable results, and foreign capital has maintained steady inflow. According to the official website of the China Securities Regulatory Commission, the net inflow of foreign capital into the A-share market last year was 384.6 billion yuan, the highest level in the past five years.
Entering 2022, the enthusiasm of foreign investment will not diminish. Wind data shows that as of January 23, the cumulative net purchase amount of northbound funds during the year reached 42.846 billion yuan. Among them, the cumulative net purchase of Shanghai Stock Connect was 34.054 billion yuan, and the cumulative net purchase of Shenzhen Stock Connect was 8.792 billion yuan.
Industry experts believe that a high level of two-way opening means that my country’s capital market is maturing. The series of measures introduced by the regulatory authorities have provided directional guidance for high-level two-way opening and ensured its stable and orderly progress. In addition, the competition brought about by opening up will further improve the supervision mechanism, and at the same time, attention should be paid to preventing risks.
Markets, Institutions, Products
Outstanding achievements in all-round opening up
In 2021, new progress will be made in the two-way opening of the capital market and international regulatory cooperation. New progress has been made in the all-round opening of markets, institutions and products.
In the market, the regulatory authorities continued to improve the two-way opening of the Shanghai-London Stock Connect. In mid-December last year, the China Securities Regulatory Commission publicly solicited opinions on optimizing and improving the Shanghai-London Stock Connect mechanism, intending to broaden its scope of application. Domestically, the eligible listed companies of the Shenzhen Stock Exchange will be included; overseas, the company will expand to major European markets such as Switzerland and Germany on the basis of comprehensive consideration of factors such as the degree of overseas market development, investor protection and supervision.
Regarding the listing of mainland enterprises in Hong Kong, the regulatory authorities have always supported eligible mainland enterprises to go public and raise funds in Hong Kong. According to the official website of the China Securities Regulatory Commission, as of the end of 2021, 1,222 mainland companies have been listed in Hong Kong, accounting for 47% of the total number of Hong Kong-listed companies.
At the same time, the regulatory authorities have further improved the relevant systems and rules for overseas listing, and supported companies to list overseas in compliance with laws and regulations. At the end of last month, the China Securities Regulatory Commission (CSRC) drafted relevant regulations to clarify and improve the regulatory system, and uniformly implement record-filing management for the direct and indirect overseas listing activities of domestic enterprises.
In terms of institutions, after the regulatory authorities have fully liberalized the restrictions on foreign shareholding ratios in securities, futures and fund management companies, foreign institutions have achieved national treatment in terms of business scope and regulatory requirements, and internationally renowned institutions have accelerated their investment and development in China. In 2021, two wholly foreign-owned securities companies, JPMorgan Chase and Goldman Sachs (China), and two wholly foreign-owned fund management companies, Fidelity and Lubrizol, will be newly established.
In terms of products, the Shanghai-Hong Kong ETF was officially launched, further smoothing the cross-border investment channels for investors in the two places. For qualified foreign investors to participate in financial derivatives trading, three new types of commodity futures, commodity options and stock index options will be opened in 2021. At the same time, two new commodity options, crude oil and palm oil options, were newly opened.
“High-level two-way opening is an important sign of the maturity of my country’s capital market. It is necessary to adhere to the high-quality opening policy, attract more foreign capital to flow to high-quality enterprises, and achieve ‘win-win’ development.” Chuancai Securities Chief Economist and Director of the Research Institute Chen Li told the “Securities Daily” reporter that in recent years, as the domestic financial market system has become more and more sound, overseas funds have continued to flow to the domestic market, which has also contributed to the high-quality development of domestic enterprises to a certain extent. It is also gradually moving towards internationalization.
The system is open to the outside world
need to be in line with international standards
In this year’s supervision work, “steady words at the head” laid the main tone of the capital market, and high-level two-way opening played the main theme of opening to the outside world.
In an interview with the media, Yi Huiman, chairman of the China Securities Regulatory Commission, pointed out that in 2022, the work of the China Securities Regulatory Commission will be carried out around the two key words of “stabilizing the word” and “reform and tackling”. Yi Huiman said that it is necessary to insist on “progress” while maintaining stability. Embody “progress” in opening up, steadily promote the institutional two-way opening of the capital market, strengthen the interconnection of domestic and foreign markets, speed up the reform of the overseas listing filing system, strengthen international securities supervision cooperation, handle the relationship between openness and security, and support enterprises to make better use of Two markets and two resource development.
According to Zhang Jun, chief economist of Morgan Stanley Huaxin Securities, it is necessary to understand the connotation of high-level two-way opening from the perspective of content and results.
“From the perspective of the content of two-way opening, relevant policies have been introduced one after another.” Zhang Jun said that if the overseas listing supervision system of enterprises is introduced, it will support qualified enterprises to list overseas in accordance with laws and regulations, and promote the investment of domestic and overseas equity, bonds and fund products. interconnection, etc. “The above measures will provide more directional guidance in specific areas for the high-level two-way opening of the capital market, and make the policy more practical, thereby promoting the steady and orderly progress of the opening up of the capital market.” He further said.
Zhang Jun said that, judging from the results of the two-way opening, the deepening of the interconnection between domestic and foreign markets will inevitably put the domestic capital market under certain competitive pressure, but this is also the only way for financial reform. A good competition pattern will make the domestic financial supervision and risk prevention plan mechanism more perfect, which will significantly reduce potential financial risks.
Lu Lingge, assistant director of China Chengxin International Research Institute, believes that high-level two-way opening requires continuous deepening of domestic and foreign market connectivity. “Deepening the interconnection of domestic and foreign markets can gradually expand the channels for cross-border capital investment and financing, realize more and more convenient two-way capital flow, improve the ability to serve the real economy, and help build a new development pattern. It is also conducive to promoting domestic institutions in international exchanges. The level of practice will be improved, and the improvement of the supervision system and the building of risk prevention and control capabilities will be promoted in an open environment.”
How to better promote high-level two-way open development? Zhang Jun suggested that at the institutional level, further promote the opening up of the domestic capital market system, in line with international standards, continue to improve the interconnection mechanism of domestic and foreign markets, and improve the convenience of domestic and foreign capital investment; at the same time, it is necessary to speed up the promotion, and the implementation has been launched in the early stage. The open policy encourages overseas high-quality financial institutions to develop their businesses in China, and supports domestic high-quality financial institutions to go global, so as to promote the ecological improvement of the capital market.
Lu Lingge said that it is necessary to improve the risk prevention mechanism and strengthen the construction of the risk prevention and monitoring system. In an open environment, the risks faced by my country’s financial market are more complex. It is necessary to establish and improve a cross-border capital flow monitoring system covering risk identification, monitoring, response and other links, to monitor market changes in a timely manner, to steadily promote opening up, and to maintain financial market stability. .