In a world increasingly interconnected through trade and finance, the significance of a robust and resilient capital market cannot be overstatedOn November 19, 2023, at the third International Financial Leaders Investment Summit, Wu Qing, a prominent figure at the China Securities Regulatory Commission (CSRC), articulated a forward-looking vision for China's capital market amid a series of incremental policy measures set to take effectHis remarks highlighted a commitment to fostering enduring stability and promoting sustainable development that aligns with China's modernization goals.

Wu emphasized that the regulatory body would continue to leverage reform as a catalyst for growth and stabilityThis would be achieved through enhancing the functional interplay between investment and financing within the capital market, thereby accelerating the establishment of a multi-tiered market system supportive of technological innovation and dedicated long-term investments

Furthermore, he assured that efforts would be made to bolster rigorous oversight and risk prevention mechanisms, ultimately solidifying the foundation for a vibrant and stable market.

Reflecting on the past year, the resilience of China’s capital market has been palpable, especially given the turbulent internal and external environmentThe CSRC has steadfastly worked to reinforce the foundations of the market, instilling confidence among investors and stabilizing expectationsWu noted five pivotal aspects that showcased this resilience.

The first highlight revolved around the support for developing new productive forcesThe CSRC has implemented a series of policies, such as the “Sixteen Measures to Support Technology,” the “Eight Regulations for the Science and Technology Innovation Board,” and the “Six Merger and Acquisition Guidelines.” These regulations aim to enhance the inclusivity and adaptability of the capital market's systems, drawing high-quality resources towards sectors driving technological innovation

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This upward trajectory is evident, as the number of A-share companies in strategic emerging industries has approached 2,700, with approximately 3,000 merger and acquisition cases filed this year alone.

Secondly, there is a pronounced focus on enhancing the investment value of listed companiesWu called upon these firms to embed a robust shareholder return ethos, improve transparency, and advance corporate governance standardsWith the establishment of guidelines for market capitalization management, listed companies were encouraged to implement consistent practices such as dividends and share buybacksAs of the end of October, A-share firms had announced a staggering cash dividend of 644.1 billion yuan and disclosed a record 1,360 share buyback plans—both figures marking all-time highs.

The third focal point was accelerating reforms geared towards the investment sectorIn September, the CSRC collaborated with the Central Financial Office, issuing guidance aimed at facilitating the entry of long-term capital, including social security and insurance funds, into the market

This initiative has aimed at creating a market environment that encourages long-term investmentsConcurrently, significant progress has been made in reforming public fund industry fees, particularly with respect to equity funds and index investments, showcasing a robust growth trajectory for equity exchange-traded funds (ETFs) that recently surpassed the 3 trillion yuan mark.

The fourth critical aspect involved stringent oversight to purify market conditionsIn light of ongoing issues with financial misconduct, the CSRC has intensified inter-agency cooperation to construct a comprehensive accountability frameworkThe enforcement of financial integrity is paramount, and in the first ten months of the year, the CSRC has tackled 658 cases of financial fraud, imposing fines totaling 11 billion yuan—outstripping the previous year's totalThe regulatory emphasis ensures that protections are in place for the predominantly retail investor demographic within the A-share market.

Lastly, Wu underscored the importance of synergizing policy efforts from various sources

Under the leadership of the central government, several strong policy shifts have been introduced to stabilize investor confidenceRemarkably, the CSRC has worked hand-in-hand with the People’s Bank of China to implement two significant monetary policy tools that facilitate easier access to capital markets for companiesWith over 120 listed firms announcing buyback funding sourced through this initiative, investor confidence appears to be revitalizing.

Wu concluded by reflecting on the positive shifts taking place in China’s capital market, noting a marked improvement in investor sentiment and heightened activity within both A-shares and Hong Kong stocks.

Looking ahead, Wu advocated for greater cross-border investment and financing easeHe asserted that adhering to an open stance is pivotal for the high-quality development of China’s capital marketsThe CSRC is set on a path towards controlled and systematic opening, focusing on the duality of development and safety to encourage more fluid cross-border investment flows.

Concrete measures are on the horizon, aimed at ensuring internationally raised capital remains accessible while enhancing the efficiency of listings for qualified domestic companies abroad

Wu reiterated the commitment to expanding connectivity with foreign markets which includes broadening the scope of the Shanghai-Hong Kong Stock Connect and the introduction of more accessible depositary receipts.

Additionally, the deepening of the bond market’s openness, along with a gradual expansion of commodity and financial futures markets to international participants, is designed to meet the diverse investment preferences and risk management needs of global investorsThis effort also encompasses a commitment to enhancing cross-border regulatory collaboration within the securities and futures sectors.

Wu highlighted Hong Kong’s critical role as a bridge connecting Mainland capital markets with the rest of the worldWith the recently announced five initiatives aimed at supporting Hong Kong, the CSRC is poised to further deepen practical cooperation between the two markets, catering to global investors eager to explore opportunities in both Hong Kong and Mainland markets.

In conclusion, Wu extended an open invitation for global investors to tap into the rich potential of China’s economic landscape and actively participate in the ongoing growth journey, promising a sustainable and high-quality development trajectory