Dear Vice Chairman Fang Xinghai, Vice Governor Zhang Xin, and Standing Committee member Zeng Pai,
Dear guests, ladies and gentlemen,
Hello, everyone! This year is the fourth straight year that we hold the global investor service event and it is also the first time that we meet in person after three years. On behalf of SZSE, I’d like to extend our warm welcome to all the leaders and guests attending the Conference.
At present, global economic growth is slowing down, the development of the world is becoming more uncertain, and the accelerated evolution of new technology is bringing about new opportunities and challenges. How to respond to volatility and uncertainty is a common concern of market participants. The 20th CPC National Congress has drawn the grand blueprint for China’s economic and social development. It has stressed that pursuing high-quality development is an essential requirement of Chinese modernization, and it has laid down a series of major strategic plans. China’s pursuit of high-quality development will inject more certainty into the world development, and it is of great significance to global economic recovery. Against such backdrop, SZSE has held the Conference to showcase the new investment opportunities in the China capital market, strengthen communication, build a consensus and deepen cooperation with relevant parties, and invite market participants to share the dividends of China’s high-quality economic development.
In recent years, under the leadership of CSRC, SZSE has steadily advanced the reform, development and stability related tasks, optimized the multi-tiered market system, enriched investment and financing products, improved the standard of opening-up, pushed factors and resources to gather in technological innovation fields at a faster speed, and actively served the formation of a new pattern of development and high-quality development.
First, SZSE has put forth effort to deepen reform and innovation and continued to optimize the market functions and the ecosystem. Taking the across-the-board registration-based IPO system reform as the lead, we have promoted in depth the innovation in issuance, listing, trading and delisting rules, improved and strengthened the whole-process regulation covering ex ante, in-process and ex post regulation, and urged listed companies to improve information disclosure quality. With those efforts, the efficiency, transparency and predictability of regulation have been significantly improved, and the market has become more inclusive and attractive. Currently, SZSE has formed the “Main Board + ChiNext Board” market pattern. The Main Board highlights large-cap blue chips and has gathered the champions of various industry segments. A group of quality “chain leader” enterprises have emerged from the Main Board. The ChiNext mainly serves growth innovators and startups. High-tech enterprises account for nearly ninety percent of the ChiNext-listed, and the enterprises from strategic emerging industries nearly seventy percent. Market trading and investment are active, and liquidity is sufficient. The SZSE market is among the world top capital markets in a number of key indicators, and its position as the most active emerging market in the world has been further consolidated.
Second, SZSE has stimulated innovation-oriented development drive, and the performance of listed companies has maintained stable growth. Facing the complex and ever-changing market environment, we have guided and supported listed companies firmly pursuing innovation-oriented development. The quality of listed companies has steadily improved, and they have demonstrated strong resilience and vitality. Their dividend returns have maintained at a relatively high level. In 2022, the SZSE-listed companies realized the operating income of nearly CNY 20 trillion in total and the net profit of nearly CNY 1 trillion. Nearly eighty percent of them made a profit. Their cumulative dividends of the year exceeded CNY 420 billion, with the average dividend payout ratio recording 35%. In particular, the SZSZ-listed companies’ R&D input exceeded CNY 660 billion, up 15% year on year. Nearly seventy percent of the R&D funds went to the three key areas of advanced manufacturing, digital economy and green and low-carbon development, which becomes the stable drive that helps the listed companies maintain long-term growth. The constituents of the Shenzhen Component Index and the ChiNext Index, which are the two core indices of SZSE, registered outstanding performance. In the first quarter this year, the operating income and net profit of the constituents of the Shenzhen Component Index from the three key areas of advanced manufacturing, digital economy and green and low-carbon development increased by 18% and 11% respectively. Among them, such indicators of the companies from the green and low-carbon development area increased by 35% and 53% respectively. The operating income and net profit of the constituents of the ChiNext Index grew by 23% and 25% respectively.
Third, SZSE has practiced the sustainable development concept and continued to refine the low-carbon development service system. As a member of the Sustainable Stock Exchanges Initiative and the WFE Sustainability Working Group, SZSE has actively advocated corporate social responsibility and sustainable development. SZSE has been actively participating in global governance of the sustainability field by taking such moves as establishing the CNI ESG Ratings Methodology, urging listed companies to practice ESG standards, enriching climate and carbon neutrality bond, index and fund products, releasing the white paper on environmental information disclosure, and refining the financial service system that supports low-carbon development. In the United Nations statistics of total carbon emissions by the companies listed on the stock exchanges in G20 member countries, the SZSE-listed companies recorded the lowest total emissions, ranking the first. Listed companies’ initiative to disclose ESG information has improved significantly. In 2022, more than 2,000 SZSE-listed companies disclosed their fulfillment of social responsibilities in their annual reports, about 1,600 disclosed information about pollution control, resource conservation, ecological protection, etc., a group of companies released a separate CSR report or ESG report, showcasing the further improvement in ESG information disclosure quality.
Fourth, SZSE has strengthened the interconnectivity of markets and further advanced high-standard opening-up. To better meet foreign investors’ asset allocation needs, we have continued to refine the Shenzhen-Hong Kong Stock Connect, expanded the scope of investment targets, and optimized the trading calendar arrangements, which are well received. We launched the depository receipt business under the Stock Connect scheme and the Greater Bay Area bond platform which supports eligible foreign institutional investors directly participating in the bond market of SZSE. We successively implemented SZSE-HKEX ETF Connect, SZSE-JPX ETF Connect and SZSE-SGX ETF Connect, continued to refine the institutional arrangements for the two-way opening-up that matches international market rules, and put forth effort to create a convenient cross-border investment and financing environment. Moreover, we continued to improve the quality and efficiency of foreign investor services and held international roadshows regularly to help foreign investors better understand the China market and Chinese enterprises. Since the beginning of the year, the transaction volume of investors via SZSE QFII, RQFII and the Shenzhen Connect took up about 9.5%, 3.4 times that five years ago. More and more international investors are investing in the SZSE market.
Dear guests and friends, the Chinese economy is huge and resilient with great leeway, and boasts specific development direction, clear development path and strong development drive. Listed companies that have a high technological content and strong competitiveness and practice the green and low-carbon development concept are constantly emerging. Opening-up is a basic state policy for China, and the China capital market is accelerating the formation of a high-standard institutional opening-up pattern. Next, guided by the guiding principles of the 20th CPC National Congress and the overall plan of CSRC, SZSE will promote reform, development and innovation through opening-up, strive to build a world-class exchange featuring a quality innovation capital center, and create a sound environment for global investors to participate in the Chinese capital market.
First, with serving high-quality development as the orientation, we will put forth effort to refine the policy and regulation mechanism and the product system. Scientific and reasonable policies and rules are the foundation that ensures efficient operation of the capital market. SZSE will consolidate and expand the achievements in the across-the-board registration-based IPO system reform and speed up to build a simple, clear and user-friendly system of policies and rules so as to make investment and financing more convenient, provide more help to enterprises in their growth, and give full play to the role of market mechanisms. Meanwhile, we will further refine the product system that includes bonds, funds, indices and derivatives and provide more long-term investment and risk management instruments so as to better meet the diversified needs of global investors.
Second, with realizing efficient regulation as the means, we will make market operation more standard and transparent. Strengthening frontline regulation is the main responsibility and main business of exchanges and is an important approach to maintain stable and healthy operation of the market. Using the across-the-board implementation of the registration-based IPO system as an opportunity, SZSE will, with information disclosure at the core, push for transparent review, transparent supervision and transparent service in depth, strengthen continuous regulation, optimize classified regulation, and promote technology-enabled regulation. We will see that intermediaries fully fulfill their responsibilities, strictly crack down on illegal acts, strive to build a more standard and transparent frontline regulation system, and constantly improve regulatory effectiveness and market transparency to make us a market that global investors are able to understand, can forecast and are willing to invest in.
Third, with facilitating win-win cooperation as the goal, we will continue to advance high-standard opening-up. Reform and opening-up are the road that the capital market must take in order to achieve healthy development. SZSE will give full play to our position advantage of “basing in the Greater Bay Area and facing the world”. Through mutual product listing, mechanism coupling, facility connection and resource sharing, we will promote integrated development of capital markets in the Guangdong-Hong Kong-Macao Greater Bay Area, optimize and expand two-way opening-up channels, and explore new modes of cross-border cooperation. Meanwhile, we will improve the level of cross-border industry infrastructure connection, strengthen regulatory capability building in the open environment, and provide more convenient and efficient services for global investors to participate in the Chinese capital market and share new opportunities presented by the high-quality development of China.
At last, I wish the Conference a complete success. Thank you!