Speech Addressed by Fang Xinghai, Vice Chairman of CSRC, at the FTSE Russell 2018 China A Share Evaluation Results Press Release and Seminar

date: 2018-9-28

 

Honorable Chairmen Huang Hongyuan, President Mark Makepeace, distinguished guests:

 

Good afternoon!

 

Today, I am very pleased to attend the “FTSE Russell 2018 China A share Evaluation Results Press Release and Seminar”, which jointly organized by the Shanghai Stock Exchanges(SSE), the Shenzhen Stock Exchange(SZSE) and the FTSE Russell. First of all, on behalf of the China Securities Regulatory Commission (CSRC), I would like to extend my warmest congratulations to the success of the meeting and welcome to President Mark Makepeace, who came from afar.

 

Just now, President Mark Makepeace announced that A shares were officially included in the FTSE Global Equity Index Series (FTSE GEIS). I am very pleased to be able to witness the inclusion of A-shares in the FTSE GEIS today. This is another milestone in the internationalization of China's capital market, an event that facilitate further introduction of long-term overseas funds into China, and that improve the structure of A Share investors, and further elevate the internationalization level and resource allocation efficiency of the A Share market. The CSRC has always welcomed and supported the A Shares’ inclusion in the FTSE GEIS. FTSE Russell has done a lot of fruitful work. The two sides maintained regular communication and contacts, gradually increased their efforts and improved their work, and achieved a series of work results. On the basis of the preliminary work, the CSRC put forward that the inclusion of the A Share into the FTSE GEIS is an important task for the further opening up of the capital market, and continuously promote relevant works. Today, FTSE Russell officially announced that A Shares would be included in its index. The event came out of efforts of various parties, and was in line with the expectations of all parties.

 

The CSRC have conscientiously implemented the spirit of important speech addressed by President Xi Jinping at the Boao Forum for Asia on the expansion of the financial industry and the opening of the market, and the decision-making and deployment of the Party Central Committee and the State Council, vigorously promoted the opening of the capital market, and substantially increased the daily turnover volume of the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect. The SSE and the SZSE continued to improve the trading suspension and resumption system and the late day trading mechanism. Ever since this year, the overall net inflow of foreign capital into A Shares has reached 230 billion yuan. This intensively reflects the long-term optimism of foreign investors on China's economic base, stable operation, timely risk prevention and control, and full confidence in the prospects of China’s accelerating the transformation of economics’ new and old kinetic energy, continuous improvement of quality, and stable development of the capital market. I have recently met with many international institutional investors, who energetically support FTSE Russell's inclusion of A Shares, for they focus on the long-term development potential of China's economy and the long-term performance of A Shares over the short-term performance of the market. We welcome these long-term investors to participate in the A-share market, and we believe that the inclusion of the A Share into the FTSE GEIS will strongly promote this process. China is a country with a high savings rate. China does not lack funds, nor do China’s stock markets. However China’s stock markets lack long-term funds, profit and loss of which need not to be calculated at the end of the year. We will certainly achieve the goal of long-term investment funds dominating the China’s stock markets. Today FTSE's decision has narrowed our distance from this goal.

 

In the next step, the CSRC will revolve around the main line of serving the real economy, unswervingly, proactively, steadily and orderly to promote the opening up of the capital market, continuously improve the quality and international influence of China's capital market, and maintain the healthy and stable development of China's capital market. On the one hand, we will conscientiously study and solve the concerns and needs of overseas investors, continuously improve the cross-border trading system, optimize the interconnection and interoperability mechanism, and complete the revision of the QFII system rules with relevant departments so as to facilitate the expansion of A Share allocation of long-term overseas funds. We will accelerate the launch of measures that facilitate foreign institutional investors to use domestic financial futures and other hedging instruments, and gradually meet the needs of institutional investors in risk management. On the other hand, according to the development of China's capital market and the need for opening up, we will coordinate the reform of the basic system of capital markets such as trading suspension and resumption, information disclosure, and transaction settlement, and continuously promote the integration of China's capital market with international best practices.

 

Distinguished guests, today is the 18th day of the lunar calendar, the best day for watching waves of the Qianjiang River in the year. This year marks the 40th anniversary of Reform and Opening up and is the new starting point for the reform and opening up journey. Just like the great waves of Qianjiang, a new round of reform and opening up will definitely push the China’s economy to a new peak.

 

Thank you again!