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Dear Vice Chairman Fang Xinghai, Executive Vice Mayor Wu Qing, Distinguished Guests, Ladies and Gentlemen:
Good morning! Our warm welcome goes to all the guests attending the SSE Global Investors Conference 2022. First of all, on behalf of the Shanghai Stock Exchange (SSE), I would like to extend a warm welcome to all the guests present and online, and sincere greetings to all our old and new friends!
Recently, the 20th CPC National Congress, which attracted worldwide attention, was successfully concluded. The Report to the 20th CPC National Congress systematically expounds the Chinese characteristics and essential requirements of Chinese modernization, draws up the grand blueprint, and proposes that we should fully, accurately and comprehensively implement the new development concept, adhere to the direction of socialist market economy reform, insist on high-standard opening-up, and accelerate the construction of a new development pattern in which the domestic cycle plays the main role and the domestic and international cycles reinforce each other. With the theme of "Openness, Innovation and Sustainability", this conference reflects the expectations of domestic and foreign investors for building a high-quality capital market, as well as the international community's attention and interest in China's reform and opening-up and future development. I would like to take this opportunity to share with you my learning from the Report to the 20th CPC National Congress.
I. Unswervingly adhering to the path of development with Chinese characteristics
Since modern times, China has been exploring the path of development for country's prosperity, national revitalization and people's well-being. As proved by practice, neither the old and rigid closed-door policy nor the road of total westernization will work. In terms of modernization, there is no one-size-fits-all model. Due to their different histories, cultures, internal structures and levels of development, countries will inevitably achieve modernization in different ways. As a great power, China has a long history of more than 5,000 years and a population of more than 1.4 billion. Given its unique national conditions, cultural traditions and historical processes, China has to firmly and independently advance the modernization in line with its own characteristics.
China's capital market is an important part of the socialist market economy with Chinese characteristics. The stock exchange is a cause established by the Party and the State, with distinct political and national attributes. We will unswervingly follow the path of developing a modern capital market with Chinese characteristics, combine the general development laws of the capital market with China's reality, adhere to the market-oriented and law-based direction, make a balanced plan for reform, development and stability, and constantly improve our ability to serve the high-quality development of the economy.
II. Unswervingly adhering to the fundamental national policy of opening-up
As China's fundamental national policy, opening-up is an inevitable choice based on historical experience and lessons. As evidenced by the history of reform and opening-up, openness brings progress, while self-seclusion leaves one behind. To achieve Chinese modernization and high-quality development, we have to unswervingly promote high-standard opening-up.
The capital market is one of the most market-oriented and innovative areas, and one of the most important areas of China's opening-up. To build a modern capital market with Chinese characteristics, we must unswervingly deepen opening-up. The SSE will earnestly implement the national deployment for a new round of high-standard opening-up, leverage the exchange's functional advantages, continuously improve its function of global capital allocation, further enhance its international attractiveness and competitiveness, boost the confidence of domestic and foreign investors, and thus promote reform and development through opening-up.
III. Unswervingly adhering to the direction of institutional opening-up
The steady expansion of institutional opening-up in terms of rules, regulations, management and standards is an inherent requirement for high-standard opening-up. The institutional opening-up of the capital market should follow the standards of stability, fairness, transparency and predictability to create a market-oriented, law-based and internationalized first-class investment and financing environment; build an institutional system that aligns with the general rules of the international capital market and a management model that suits the high-standard international rules of investment and financing, and establish a unified and open modern capital market system with orderly competition and promote the ordered and free flow of capital and the deep integration of markets.
In recent years, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, under the leadership of the China Securities Regulatory Commission, the SSE has worked with all parties in the market to conscientiously implement the strategic deployment of expanding financial opening-up, steadily promote high-standard institutional opening-up, continuously improve relevant institutional arrangements, further facilitate cross-border investment by domestic and foreign investors, and provide better support for cross-border financing and development of enterprises. With its continued internationalization, the SSE market has played a positive role in serving the construction of Shanghai as an international financial center and the national strategy of opening-up.
First, the Stock Connect mechanism has been constantly optimized. As the capital market opening-up measure with distinctive Chinese characteristics, the Shanghai-Hong Kong Stock Connect has become an important channel for international investors to join the A-share market. Following the Shanghai-London Stock Connect, the depositary receipts business under the Stock Connect has been further expanded to Germany and Switzerland this year. So far, eight SSE companies have issued GDRs on the London Stock Exchange and the SIX Swiss Exchange. As the A-share market continues to grow in attractiveness to international investors, the shareholding by foreign capital has been on the rise.
Second, the opening-up of the bond market has been progressing steadily. Efforts have been made to continuously optimize the issuance system of panda bonds and actively serve the construction of the Belt and Road. Foreign issuers have issued more than 100 billion yuan of Belt and Road bonds and panda bonds on the SSE. In June this year, together with China Securities Depository and Clearing Corporation Limited, the SSE issued rules to support foreign institutional investors to directly open securities accounts for participation in bond investment on the SSE. A number of foreign institutions have taken part in the trading, further expanding the investment channels for foreign funds.
Third, the toolbox for cross-border asset allocation has been constantly enriched. The variety of cross-border funds continues to expand. So far, there are 47 cross-border ETF products on the SSE, totaling over 120 billion yuan, investing in countries and regions such as Hong Kong, the United States, Germany, France and Japan. The ETF connectivity cooperation mechanism has been continuously enhanced. The China-Japan ETF connectivity and the inclusion of ETF under the Shanghai-Hong Kong Stock Connect have been launched successively and are running smoothly and efficiently on the whole.
Ladies and Gentlemen!
At present, the world is undergoing profound changes unseen in a century at an accelerating pace, and economic globalization is facing a reverse flow, with increasing uncertainties and destabilizing factors in the world economy. However, the fundamentals of China's economy remain unchanged, namely strong resilience, enormous potential, vast room for maneuvering and long-term sustainability. Guided by the spirit of the 20th CPC National Congress, the SSE will follow the development requirements of Chinese modernization to develop a modern capital market with Chinese characteristics. We will adhere to the principles of the market, rule of law and internationalization, implement the guidelines of "building the system, non-intervention and zero tolerance", follow the regulatory philosophy of "standing in awe of the market, the rule of law, expertise and investors, and forging synergy in comprehensive support for reform, development and stability of the capital market", steadily promote the institutional opening-up of the capital market, and achieve high-quality development with high-standard opening-up. We will continue to optimize the arrangements for the Stock Connect mechanism. This includes further improving and expanding the Shanghai-Hong Kong Stock Connect mechanism, strengthening cooperation with major global securities markets, attracting high-quality overseas listed companies to issue CDRs on the SSE, and constantly exploring innovative ETF connectivity mechanisms. We will continue to improve the cross-border investment and financing system. This includes enriching the product system of the exchange market, and further facilitating the participation of overseas issuers and investors in the stock and bond markets of the exchange. We will further strengthen the building of our regulatory capacity in an open environment. This includes coordinating openness and security, constantly improving our risk prevention, early warning and handling capabilities, continuously refining our risk prevention and control system, and thus safeguarding the smooth operation of the capital market. Also, we are open to advice and suggestions from domestic and foreign investors on the reform and development of the SSE, in the hope of building the capital market ecology of joint contribution, broad participation, and shared benefits.
I wish this conference a great success! Thank you!
