Yi Gang: there is no contradiction between negative list and licensed operation of financial industry

category:Finance
 Yi Gang: there is no contradiction between negative list and licensed operation of financial industry


In his video speech, Yi Gang, governor of the peoples Bank of China, said that we should continue to promote the opening up of the financial industry and create a market-oriented and legalized international financial development environment through the following three aspects:

First, we should fully implement the pre admission national treatment plus negative list management system, and promote the transformation of the concept and mode of opening up. Although Chinas financial industry has been opening up rapidly, we have also noticed in our communication with foreign financial institutions and foreign central banks that foreign capital still needs to apply for a lot of permits after the restrictions on institutional access and business development have been lifted, and there are still many operational problems and demands for the opening up of the financial industry. This shows that there is still a lot of work to be done in the transformation of the financial industry to negative list management.

Second, we should comprehensively promote the opening up of the financial services industry, the reform of the RMB exchange rate formation mechanism and the internationalization of the RMB. The reform of RMB exchange rate formation mechanism should enhance the flexibility of RMB exchange rate, and better play the role of automatic stabilizer in macroeconomic stability and balance of payments. The internationalization of RMB should adhere to the market-oriented principle, and the regulatory authorities should mainly reduce the restrictions on the cross-border use of RMB and let it be. Under the new situation, the internationalization of RMB can further improve the support system for the use of local currency on the basis of adhering to the market orientation, so as to create a better environment and conditions for the play of the role of the market.

Third, we should prevent risks while speeding up the opening up. We should strengthen macro Prudential Management, improve the professionalism and effectiveness of financial supervision, build all kinds of firewalls, improve the ability to prevent and resolve major risks, and make the regulatory capacity adapt to the level of openness.

The following is the full text of the speech

Ladies and gentlemen, distinguished guests

It is a great pleasure to be here at the Bund financial summit to share with you the progress of Chinas financial industry opening up in recent years and its prospects under the new development pattern.

1u3001 Opening up of financial industry under the new development pattern

Chinas economy has changed from high-speed growth to high-quality development. President Xi Jinping put forward the requirement of building a new development pattern, which is a strategic decision made according to the development stage, environment and conditions of our country. The new development pattern is not to operate in a closed door, but to make better use of the two markets and resources at home and abroad to achieve stronger and sustainable development.

The deep integration of Chinas economy into the global economic and trade system is an important background for building a new development pattern. China is an important participant in the global economic and trade system. It has become the largest trading country and the second largest direct investment destination. It is an important hub and manufacturing center of the global value chain. It will contribute nearly 30% to the global economic growth rate in 2019-2020.

It is necessary to build a new open economic system with a higher level. The construction of the new development pattern requires better use of the two markets and resources at home and abroad, not only to facilitate the flow of commodities and elements, but also to promote the opening of rules and institutions, enhance the competitiveness of the system, so as to improve the quality and efficiency of economic development. This is not only good for Chinas economy, but also for the global economy.

Further opening up of the financial industry is an inevitable requirement for building a new development pattern. The opening of financial industry not only introduces institutions, businesses and products, but also increases the supply of financial elements, and also promotes the perfection of system rules and the supply of financial system. This is conducive to improving the efficiency and ability of financial services to the real economy and helping Chinas high-quality economic development.

2u3001 Progress made in the opening up of financial industry in recent years

In the past two years, Chinas financial industry has taken a landmark step in opening up, and more than 50 opening measures have been announced.

First, the restrictions on the ratio of foreign shares in banks, securities, funds, futures and life insurance should be completely abolished. Foreign financial institutions are actively expanding their presence in China. Since 2018, 8 foreign holding securities companies, 2 foreign holding fund management companies and 20 private equity investment fund managers have been added. International rating agencies such as S & P and Fitch have entered the Chinese market.

Second, we will continue to expand the business scope of foreign financial institutions. For example, the business scope of foreign-funded securities companies is no longer subject to separate restrictions, so as to achieve the consistency of domestic and foreign capital. Foreign banks are allowed to obtain the qualification of lead underwriter of debt investment instruments after market evaluation, and branches and subsidiaries of foreign banks are allowed to obtain fund custody qualification.

Third, we should continue to improve the two-way opening of the capital market. In the first nine months of this year, foreign investors accumulated 719.1 billion yuan of bonds in Chinas interbank bond market. Recently, FTSE Russell announced plans to include Chinas treasury bonds in its world treasury bond index.

It should be noted that the opening up of the financial industry is mutually beneficial. Finance is a competitive service industry. Open competition is helpful to the development and efficiency of Chinas own financial industry. Foreign capital entering the Chinese market can also better share the dividends of Chinas economic development and reform and opening up, and achieve mutual benefit and win-win results.

3u3001 We will continue to promote the opening up of the financial industry and create a market-oriented and legalized international financial exhibition environment

First, we should fully implement the pre admission national treatment plus negative list management system, and promote the transformation of the concept and mode of opening up. Although Chinas financial industry has been opening up rapidly, we have also noticed in our communication with foreign financial institutions and foreign central banks that foreign capital still needs to apply for a lot of permits after the restrictions on institutional access and business development have been lifted, and there are still many operational problems and demands for the opening up of the financial industry. This shows that there is still a lot of work to be done in the transformation of the financial industry to negative list management.

There is no contradiction between the negative list and the licensed operation of the financial industry. Under the negative list mode, the access and development of financial institutions must also meet the qualification requirements and licensed operation. Under the negative list mode, the regulatory authorities can transfer more resources from access management to in-process and post supervision, so as to improve the supervision efficiency.

Second, we should comprehensively promote the opening up of the financial services industry, the reform of the RMB exchange rate formation mechanism and the internationalization of the RMB. The reform of RMB exchange rate formation mechanism should enhance the flexibility of RMB exchange rate, and better play the role of automatic stabilizer in macroeconomic stability and balance of payments. The internationalization of RMB should adhere to the market-oriented principle, and the regulatory authorities should mainly reduce the restrictions on the cross-border use of RMB and let it be. Under the new situation, the internationalization of RMB can further improve the support system for the use of local currency on the basis of adhering to the market orientation, so as to create a better environment and conditions for the play of the role of the market.

Third, we should prevent risks while speeding up the opening up. We should strengthen macro Prudential Management, improve the professionalism and effectiveness of financial supervision, build all kinds of firewalls, improve the ability to prevent and resolve major risks, and make the regulatory capacity adapt to the level of openness.

Under the new situation, we will promote the opening of the financial industry to make new and greater progress, and provide strong support for the construction of a new development pattern and high-quality economic development.

Thank you!

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