Wu Xiaoqiu, a renowned financial scientist and dean of the National Financial Research Institute of Renmin University of China, expressed confidence in China’s capital market despite the current challenges. Speaking at the 2024 (13th) China Capital Annual Conference of Rongzhong Finance, Wu emphasized the significance of the capital market in China’s quest to become a financial power and called for measures to restore market confidence.
Referring to the crisis in the U.S. capital market in 2021, Wu highlighted the unprecedented intervention by the Federal Reserve, which subverted traditional definitions and successfully stabilized the market, leading to new highs. Drawing on this comparison, Wu stressed the importance of prioritizing stability in the domestic capital market.
Wu underscored the multifaceted role of the capital market, emphasizing that it goes beyond its financing function to include investment, wealth management, and asset allocation for society. He also called for the suspension of initial public offerings (IPOs) and proposed comprehensive reforms in the IPO registration system, securities lending mechanism, and holding reduction rules to restore market confidence.
In his speech themed “Restoring Market Confidence is the Top Priority for China’s Capital Market,” Wu pointed out that despite China’s economic recovery, the market’s response has been less positive, indicating an insufficient understanding of the market. He urged stakeholders to recognize the strategic value of developing China’s capital market, stating that it is critical to the nation’s goal of becoming a financial power and plays a vital role in the modern financial system.
Highlighting the need for a deep understanding of common sense to comprehend the market, Wu dispelled misconceptions about the rise and fall of stocks, asserting that stock rises reflect societal confidence and positive expectations. He urged that the market’s functional positioning be clarified and aligned with the inherent requirements and basic laws of the capital market.
Additionally, Wu stressed the importance of taking bold measures to maintain market stability, drawing parallels with the U.S. market and calling for coordinated efforts from regulatory authorities and high-level departments to address the current market challenges.
While Wu expressed confidence in the Chinese market’s future development, he called for institutional reforms and immediate measures to restore investor confidence. He emphasized the significance of implementing strict penalties for false information disclosure by issuers and impartiality in intermediaries, arguing that these prerequisites are essential for the success of the registration system.
The article highlighted Wu’s call for the suspension of IPOs and proposed improvements in the IPO registration system, holding reduction rules, and securities lending mechanism to address market challenges. Ultimately, Wu’s remarks underscored the importance of restoring market confidence and stabilizing the capital market, positioning it for future growth and development.
The source of this article is Finance Eleven, and it provides a risk warning and disclaimer, cautioning readers about market risks and recommending that users consider their unique circumstances before making investment decisions.