Cao Yu, vice chairman of the CBRC, said that the relationship between strengthening supervision and supporting innovation should be well handled. We will always take the three advantages principle as the basic standard to measure the rationality of financial innovation, and resolutely crack down on pseudo innovation and random innovation that deviate from the needs of the real economy, endanger financial stability and infringe on the rights and interests of consumers.
Liu Guiping, vice president of the peoples Bank of China:
Promoting the construction of a new development pattern with the opening up of finance at a high level
Liu Guiping, vice president of the peoples Bank of China, delivered a keynote speech on the theme of opening up with a high level of finance to serve the new development pattern. He said that the practice of reform and opening up shows that the more open the field is, the more competitive it is; the less open the field is, the easier it is to fall behind and accumulate risks. Expanding the opening up of the financial industry will inject new vitality into Chinas financial industry, help to improve the overall competitiveness of Chinas financial industry, achieve higher level, higher level and more healthy development, and provide great momentum for the construction of a new development pattern. The following is the full text of the speech.
The hitherto unknown outbreak of the novel coronavirus pneumonia has brought unprecedented impact on Chinas economic and social development, and accelerated the evolution of the worlds great changes in the past century. Look far ahead from a high plane of vision, comrade Xi Jinping as the core, we should coordinate the work of epidemic prevention and control and economic and social development, and put forward the new development pattern of building a domestic recycling economy as the main body and promoting the domestic and international double circulation and promoting each other according to the development stages, environment and conditions of our country. Speeding up the construction of a new development pattern is an important guiding principle for Chinas economic and social development during the 14th five year plan period, and also the fundamental principle for deepening financial reform and opening up in the future.
Next, I would like to talk about the new development pattern of financial high-level open services.
1u3001 The new development pattern is open domestic and international double circulation
The construction of a new development pattern is a systematic and deep-seated reform, which emphasizes the overall planning of the supply side and demand side, domestic and international circulation, economy and finance. General secretary Xi Jinping stressed repeatedly that the new development pattern is by no means a closed domestic cycle, but an open domestic and international double cycle. It is necessary to comply with the changes in the domestic and international situation, based on a smoother domestic economic cycle, implement a wider scope, wider scope and deeper level of opening up, realize the mutual promotion of the dual cycle through reform, and promote the high-quality economic and social development during the 14th five year plan period.
It has a solid theoretical basis and profound practical significance to build an open, international and domestic dual cycle mutually promoting new development pattern. The cross-border flow and global allocation of commodities, talents, capital, technology and other elements can help to reduce transaction costs, improve the efficiency of resource allocation, and improve total factor productivity. The research shows that the rise of global value chain is one of the most significant changes in the world economy in the past few decades. The degree of specialization in various countries has increased, and the global labor productivity has been improved. According to the classic international economics theory, based on the domestic resource endowment, giving full play to the comparative advantage and promoting the dynamic transformation of comparative advantage to a higher level according to the changes of internal and external environment, can improve economic growth and trade welfare, and achieve mutual benefit and win-win between countries. In recent years, the world is facing the challenges of slowing economic growth and prominent structural contradictions. Global cooperation is needed to deal with climate change and fight the new epidemic. In the face of major crises, no one can stand alone. All countries are a community of shared destiny and need to work together in the same boat for common development.
From the internal and external environment that China is facing at present, the realization of sustainable high-quality development needs to give full play to the mutual promotion of domestic and international circulation. From the international point of view, the great changes that have not happened in a hundred years have accelerated the evolution, and the international political and economic pattern has undergone profound adjustments. In the future, Chinas foreign development environment will be more complex. In recent years, the rise of populism, the escalation of trade frictions and the rise of anti globalization trend of thought actually reflect the mentality of zero sum game or even negative sum game that are unable to solve domestic structural problems and try to transfer contradictions to the international community. Recently, 15 countries, including China, signed the regional comprehensive economic partnership agreement (RCEP), which demonstrates Chinas determination to open wider to the outside world. It is an important measure to speed up the construction of a dual cycle, and a powerful response to trade protectionism and anti globalization. From the domestic point of view, Chinas economy is in the key period of transforming the development mode, optimizing the economic structure and transforming the growth momentum. The main social contradictions are transformed into the contradictions between the peoples growing needs for a better life and unbalanced and inadequate development. Through the mutual promotion of domestic and international dual cycle, it can gather more resources and provide more space for the development of domestic enterprises, create new advantages of international cooperation and competition, and realize high-quality development.
The practice of reform and opening up shows that the more open the field, the more competitive; the less open the field, the easier it is to fall behind and accumulate risks. Expanding the opening up of the financial industry will inject new vitality into Chinas financial industry, help to improve the overall competitiveness of Chinas financial industry, achieve higher level, higher level and more healthy development, and provide great momentum for the construction of a new development pattern.
Through high-level opening up, we will introduce more high-quality financial resources at home and abroad to participate in the domestic big cycle. Chinas economy is turning to the stage of high-quality development, but the problem of unbalanced and inadequate development is still prominent. From the demand side, it is important to promote consumption in an all-round way, improve residents income and ensure peoples life. Through financial opening, we can strengthen the docking of domestic financial system, financial market and financial system rules with the international, allow foreign capital to participate in domestic asset management market deeply, and provide more diversified channels for increasing residents property income. At the same time, we can introduce more financial institutions and professional investors to participate in the construction of the third pillar of pension insurance, improve the level of pension investment management, expand the scope of pension assets selection of residents, and disperse investment risks, so as to solve the problem of insufficient pension in the process of population aging. From the supply side, the adaptability of Chinas supply system to domestic demand needs to be improved, the economic cycle is still blocked, the manufacturing industry is facing transformation and upgrading, and the imbalance of regional industrial development still exists. Taking the financial opening as an opportunity, building a more perfect financial market system, product system, institutional system and infrastructure system can give better play to the financial pricing function, risk dispersion function and service function, and promote the supply side structural reform by using the market-oriented incentive and restraint mechanism, and guide all kinds of funds to effectively participate in the domestic big cycle.
To provide high-quality financial services for economic entities to participate in international circulation through financial openness. On the one hand, we should improve the efficiency of financial support for trade development. Foreign trade is an important part of Chinas open economy, an important carrier to promote the upgrading of consumption structure and industrial structure, and an important driving force for economic development. Under the circumstances of increasing downward pressure on the global economy, rising volatility in the international financial market, rising trade protectionism and weakening Chinas cost advantage, we should promote the innovative development of foreign trade and cultivate new advantages in participating in international cooperation and competition under the new situation. Under the premise of controllable risks, simplify the business process of cross-border RMB and foreign exchange management, guide banks, insurance and other domestic and foreign-funded financial institutions to optimize foreign trade financial services, give full play to the role of import and export credit and export credit insurance, facilitate enterprises to manage risks and reduce financing and exchange costs. On the other hand, we should improve the financial support service system for enterprises to go out. China is the second largest foreign investment country in the world, but there is still a lot of space in forming a complete industrial chain and increasing the proportion of investment in knowledge and technology intensive industries. Through a higher level of financial openness, we can improve the ability to use international capital and international market, and provide enterprises with a global unified credit, marketing, management and service system for their overseas investment. This will help to broaden the financing channels for enterprises to go out, innovate the mode of foreign investment, optimize the industrial structure of foreign investment under the new development pattern, and better coordinate the domestic and international markets and two kinds of capital Source.
Through high-level opening-up, we will promote financial reform in depth, and improve the quality of financial system development and the ability to cope with risks. The expansion of financial opening is conducive to the introduction of diversified business models, advanced technology and management concepts, the introduction of scientific and reasonable institutional arrangements, the promotion of reasonable competition, the improvement of the efficiency of financial market resource allocation and the service level of financial institutions, and the improvement of the operational efficiency of Chinas financial institutions; it is conducive to keeping up with international high standards and improving financial supervision and market-oriented incentive and restraint Mechanism. Through expanding the opening up, improving the comprehensive competitiveness and anti risk ability of financial enterprises, and improving external supervision and restraint, the national financial security can be fundamentally maintained.
3u3001 Thoughts on promoting the opening up of finance at a high level
In recent years, according to the general secretary Xi Jinpings request for opening sooner or later, not sooner than we should be slow, a series of more than 50 open measures were announced by the NPC and CPPCC, and the financial industry made important progress in opening up to the outside world. The restrictions on the proportion of foreign shares in banks, securities, funds, futures, life insurance and other fields have been completely abolished, and the qualification requirements for foreign shareholders have been relaxed continuously; national treatment has been given to foreign investors in the fields of enterprise credit investigation, rating and payment; the interconnection of capital markets has been deepened, and the supporting accounting, tax and trading systems have been continuously improved.
The novel coronavirus pneumonia has not disrupted the opening pace of Chinas financial market. Since this year, Fitch has become the second international rating company to enter the Chinese market after S & P. foreign financial institutions such as Goldman Sachs, Morgan Stanley, Credit Suisse and other foreign financial institutions have realized the control of their joint venture securities companies in China, and the joint venture company initiated by American Express in China has obtained the bank card clearing business license. Among the worlds three major bond indexes, Chinas bonds have been included in the index of Pemberley and JPMorgan Chase, and there is a clear timetable for the inclusion of Chinas bonds in the FTSE Russell index.
One is to promote the systematic and institutionalized opening of the financial industry. We will fully implement the pre admission national treatment plus negative list management system, provide a fair and fair competition environment for foreign capital to enter the domestic market, give play to the important role of domestic and foreign financial institutions in connecting domestic and international dual circulation, and provide better financial services for various market entities participating in internal and external circulation. On the basis of maintaining and advocating the liberalization and facilitation of trade and investment, we should promote the reform of rules and optimize the arrangement of institutional supply, so as to form a new financial opening system that can adapt to the high-quality economic development and the new development pattern.
The second is to promote the opening of financial markets and the interconnection of infrastructure. Taking the implementation of the development strategies of Shanghai international financial center, Guangdong, Hong Kong and Macao Bay area, Hainan free trade port and other national development strategies as the breakthrough point, we should meet the needs of international investors in allocating RMB assets, expand the high-level opening of the financial market in accordance with the principles of internationalization, marketization and legalization, further facilitate foreign investors to use RMB to invest in domestic bonds and stocks, and optimize the interconnection of financial markets Through the arrangement, improve the liquidity and pricing efficiency of the capital market.
Third, steadily and prudently promote the internationalization of RMB. We should adhere to the market driven and enterprise independent choice, and take the service of the real economy as the guidance, further optimize the supporting policies for the cross-border use of RMB, enhance the attractiveness of RMB in foreign trade, investment and financing, and financial market transactions, and promote trade and investment facilitation. We will improve the RMB exchange rate formation mechanism, accelerate the construction of the foreign exchange market and opening up to the outside world. We will deepen monetary cooperation and create a new type of mutually beneficial cooperative relationship based on the free use of RMB. We will improve the RMB internationalization infrastructure and the arrangement of RMB clearing banks, and improve the efficiency of RMB clearing. We will support the development of offshore RMB market and promote the formation of a virtuous circle of RMB onshore and offshore markets.
Four, one belt, one road and one high quality development. Taking six corridors, six roads, multi countries and multi ports as the main framework, we will vigorously promote interconnection and industrial cooperation, and expand the space for financial cooperation. One belt, one road, is to improve the financing system of one belt and one road, following the international practice and debt sustainability principle.
The fifth is to improve the risk prevention and control system in line with the comprehensive opening up. We will work together to promote the opening up of the financial industry, the free use of RMB and the reform of the RMB exchange rate formation mechanism, build a wider financial safety net, and consolidate the institutional and institutional basis for risk prevention and control. We should establish and improve the macro Prudential + micro supervision two in one management framework for cross-border capital flows, strengthen behavioral supervision, and prevent systemic risks of cross-border capital flows. We will strengthen cross-border regulatory and disposal cooperation, and prevent cross-border regulatory arbitrage and risk transmission. High tech should be widely used to improve the efficiency of supervision and the effectiveness of risk prevention and control.
Cao Yu, CBRC:
How to improve the financial supervision system under the new development pattern
Cao Yu, vice chairman of China Banking and Insurance Regulatory Commission, delivered a keynote speech on building an effective financial regulatory system under the new development pattern at the 2020 annual academic meeting of China finance society and the annual meeting of China Financial Forum. He said that under the new development pattern, financial regulators shoulder new missions and tasks, and need to constantly explore regulatory concepts and methods under the new situation, constantly improve the effectiveness of supervision, and form a benign interaction and positive incentive between supervision and the market. In the shaping of the concept of financial supervision, we should respect the financial laws, maintain the supervision power and release the vitality of the institutions; in the improvement of the supervision methods, we should constantly strengthen the institutional supervision, realize the full coverage of risk supervision, and vigorously promote the collaborative supervision. The following is the full text of the speech.
The Party Central Committee and the State Council have always attached great importance to financial work. General secretary Xi Jinping pointed out that finance is an important core competitiveness of the country, and financial security is an important part of national security. It calls for strengthening supervision and improving the ability to prevent and defuse financial risks.
Through the cooperation between the CIRC and various departments, the service level of the banking and insurance industry has been continuously improved. First, give full play to the role of the main force of the banking industry. There are more than 4600 institutions in the banking industry, accounting for 86% of the total number of financial institutions; the asset scale is about 315 trillion yuan, accounting for 91% of the total assets of the financial industry. At present, the bond financing accounts for 61% of the total amount of bond financing in the same period, accounting for 61% of the total amount of bond financing in the real economy. Second, give better play to the insurance industrys service guarantee function. In the first 10 months of this year, the insurance industry has underwritten 7349 trillion yuan and paid 1.1 trillion yuan. At the same time, insurance funds invested 21 trillion yuan in equity and creditors rights, providing long-term and stable support for the development of capital market and the construction of key fields.
2u3001 Actively shaping the concept of financial supervision in line with the new development pattern
Under the new development pattern, financial regulators shoulder new missions and tasks. They need to constantly explore the regulatory concepts and methods under the new situation, constantly improve the effectiveness of supervision, and form a positive interaction and positive incentive between supervision and market.
First of all, we should respect financial laws. The most basic experience gained from the long-term practice of financial supervision at home and abroad is to follow the objective law of financial operation. First, we should adhere to the prevention of financial risks as the primary goal. The financial industry is an industry of managing and managing risks. It is an inherent feature of finance to coexist with risks. The duty of regulators is to grasp the nature of risk prudently, regulate the behavior of financial institutions in time, and firmly hold the bottom line of no systemic risk. Second, we should adhere to serving the real economy as the fundamental task. Financial and economic co-existence and prosperity, leaving the real economy self cycle, will only aggravate the accumulation of financial risks. Regulators should lead the financial industry to stick to their standard duties and always take serving the real economy as the foothold of business development. Third, we should insist on protecting the legitimate rights and interests of consumers as an important mission. Finance has a strong public attribute, which is related to the peoples wealth security and life security. Regulators should put consumer protection throughout the whole process of supervision, and maintain a zero tolerance attitude towards illegal activities.
Second, it is necessary to maintain supervision and control. Under the great changes that have not taken place in a century, profound changes have taken place in the domestic and international environment. Financial supervision should be based on the basic pattern of separate operation and supervision in Chinas financial industry, establish bottom line thinking and maintain strategic determination. First, we should adhere to the determination of professional focus. The Party Central Committee and the State Council firmly carried out the reform of the financial supervision system, established the China Banking and Insurance Regulatory Commission, further integrated and strengthened the regulatory responsibilities of bancassurance. This requires us to be better based on our profession, remain focused, loyal to our duties, precise prevention and control, and unswervingly adhere to the direction of strong supervision and strict supervision. Second, we should adhere to the determination of supervision according to law. Supervision according to law is not only the boundary and criterion for supervisors to perform their duties, but also the source and basis of regulatory authority. We should always maintain the transparency of regulatory rules, maintain the consistency of regulatory standards, and apply consistent regulatory standards to both Chinese and foreign-funded institutions, state-owned and private institutions.
3u3001 Continuous improvement of regulatory approach
Under the new development pattern, the financial industry and regulators are facing new situations and tasks. The cbcirc will adhere to the bottom line of principles, strengthen the construction of modern regulatory system, improve regulatory methods and methods, and enhance regulatory effectiveness.
One is to continuously strengthen institutional supervision. The legal person organization is the basic carrier of financial business, the initial source of financial risk, and the first responsible person and the first line of defense to prevent financial risk. At present, China has established a regulatory operation system based on institutional supervision, which has laid a solid foundation for the long-term stable operation of Chinas financial industry. We should make good use of and develop this basic experience, take institutional supervision as the core, improve the corporate governance structure as the starting point, and take market access, off-site supervision and on-site inspection as the axis to strengthen capital supervision, liquidity supervision and solvency supervision of financial institutions, so as to realize multi-dimensional, deep-seated and full cycle supervision of corporate institutions.
The second is to achieve full coverage of risk supervision. With the continuous exploration of comprehensive operation, cross industry and cross market cross financial risks are becoming increasingly prominent, regulatory vacuum and regulatory overlap interweave. On the basis of institutional supervision, we should pay more attention to the organic combination of functional supervision and institutional supervision, organize close regulatory matrix, broaden regulatory vision, extend regulatory chain, penetrate and identify the nature of risk, so as to achieve full coverage of institutions, business and risk supervision.
Third, vigorously promote collaborative supervision. At present, the added value of Chinas financial industry accounts for about 8% of GDP. The financial industry is integrated into all aspects of social operation, and it is difficult to achieve the regulatory objectives only relying on financial management departments. Under the unified command of the financial commission, it is necessary to strengthen the work coordination between the supervision department and the macro management department, as well as between the financial department and other departments, so as to perform their respective duties and fulfill their duties, as well as to coordinate and communicate closely. We should pay more attention to the coordination efficiency of macro prudential supervision, micro prudential supervision and behavior supervision to form cross market and cross industry risk defense lines; pay more attention to the optimal combination of financial policies, industrial policies and fiscal policies to form a joint force of policies and measures; we should pay more attention to the enthusiasm of the central and local governments to form a national one game of financial risk prevention and control.
Finally, I would like to emphasize that improving and strengthening financial regulation is inseparable from the construction of regulatory agencies themselves. There are more than 2.88 trillion yuan of supervisory staff in the new banking supervision and Management Commission. On the one hand, we should continue to strengthen the construction of the supervision team, thoroughly implement the requirements of loyalty, specialization and practicality, carry forward the spirit of conscientiousness, daring to supervise, proficient in supervision and strict accountability, and constantly expand the professional and dedicated supervision Iron Army. On the other hand, we should actively explore the application of regulatory science and technology, and improve the ability of digital supervision, technology supervision and intelligent supervision through big data, cloud computing, artificial intelligence and other technologies.
The Fifth Plenary Session of the 19th CPC Central Committee put forward the task of improving the modern financial supervision system. The CBRC will firmly implement the requirements of the central government and continuously improve the effectiveness of supervision. We welcome all sectors of the community as always to care, understand and support financial regulation, offer suggestions and gather wisdom, and jointly contribute to the high-quality development of the banking and insurance industry!
Yan Qingmin of China Securities Regulatory Commission: improving the quality of listed companies
Help the capital market serve the new development pattern
Yan Qingmin, vice chairman of China Securities Regulatory Commission, delivered a keynote speech on the theme of building a new development pattern with high-quality listed companies. He said that the capital market helps to build a new development pattern, and high-quality listed companies are the micro basis. Starting from the development stage of Chinas capital market and the reality of listed companies, we should focus on the advanced nature of the industry, the effectiveness of governance and the adaptability of supervision, and promote the construction of new development pattern with high-quality listed companies. The following is the full text of the speech.
Centering on the theme of building a new development pattern with high-quality listed companies, I would like to talk about the thinking and experience of learning the spirit of the Fifth Plenary Session of the CPC Central Committee for your reference.
The proposal adopted at the Fifth Plenary Session of the CPC Central Committee proposes to accelerate the construction of a new development pattern with the domestic big cycle as the main body and the domestic and international dual circulation promoting each other, and organically combine the implementation of the strategy of expanding domestic demand with deepening the structural reform of the supply side. As the hub of modern economic and financial system, the capital market should give further play to the functions of resource allocation, asset pricing, risk mitigation, etc., and help implement the double cycle strategy by promoting science and technology self-reliance, matching supply and demand, optimizing financial structure and opening up to the outside world. Since last year, the CSRC has conscientiously implemented the nine character policy of system building, non intervention and zero tolerance of the financial commission of the State Council. Guided by the reform of the registration system of the science and technology innovation board and the growth enterprise market, the CSRC has improved the multi-level capital market system, strengthened the construction of the basic system, paid more attention to the balance between the investment side and the financing side, and paid more attention to expanding the strength of institutional investors. On the one hand, since this year, there are more than 340 new listed companies on the Shanghai and Shenzhen stock exchanges, including nearly 180 on the science and technology innovation board and the reformed gem, which have effectively served the real economy and technological innovation. On the other hand, more long-term funds have been allocated to a shares. Compared with the beginning of last year, the scale of equity funds has increased by 69%, and the shareholding ratio of professional institutional investors has continued to increase, and the market structure and ecology have accumulated Change from pole to good.
Capital market helps to build a new development pattern, and high-quality listed companies are the micro basis. Not long ago, the State Council issued the opinions on further improving the quality of listed companies, which clarified the overall requirements, implementation paths and specific tasks of this work under the new situation. Starting from the development stage of Chinas capital market and the reality of listed companies, we should focus on the advanced nature of the industry, the effectiveness of governance and the adaptability of supervision, and promote the construction of new development pattern with high-quality listed companies.
First, enhance the advanced nature of the industry and consolidate the foundation for the high quality development of listed companies.
2u3001 Strengthening the effectiveness of governance and grasping the key of high quality development of listed companies
As a public company, the governance of listed companies is very important. Without effective governance, listed companies cannot become century old stores. In the process of enterprise development, enterprises will face many uncertainties, such as market risk, compliance risk, debt risk, etc., but the most fundamental one is moral hazard, that is, the key minority violate the obligations of honesty and trustworthiness, diligence and responsibility, abuse the control right or dominant position, and seriously infringe on the interests of the company and small and medium shareholders. To prevent moral hazard, we need not only external constraints such as supervision, but also internal checks and balances of corporate governance.
From a global perspective, the tradition of corporate governance can be divided into British and American model and German Japanese model. In 1999, the organization for economic cooperation and development (OECD) integrated the above two models and formulated the principles of corporate governance, which has become the international benchmark in the world. In 2015, OECD revised the principles according to the practice of international corporate governance, paying close attention to the balance of shareholders rights, emphasizing the role of stakeholders in corporate governance, and highlighting the overall risk management of the company. In 2016, China solemnly promised to support the implementation of the OECD principles at the G20 Hangzhou meeting. In 2017, the SFC was invited to join the OECD Corporate Governance Committee as a participant and upgraded to a joint partner when it comes to the implementation of the principles. In 2018, China Securities Regulatory Commission (CSRC) revised the governance standards for listed companies by drawing on the experience of overseas mature markets.
This year, in the No.14 document issued by the State Council, standardizing corporate governance and internal control is listed as the first of 17 specific tasks to improve the quality of listed companies. From the reality of our country, to promote the formation of effective checks and balances of corporate governance, we should work hard on the three highlights. One is to highlight the regulation. We should strengthen the certainty and operability of governance rules, avoid the principle and abstraction of governance requirements, and provide guidance and follow for listed companies to improve governance through clear, clear and strictly implemented rules. The second is to highlight the promotion of classification. For the state-owned holding listed companies, the key point is to transform the mechanism, continuously improve the modern enterprise system, perfect the incentive and restraint compatible mechanism, and enhance the internal value of enterprises. For private listed companies, the focus is on strengthening internal control. In view of the problems such as the behavior of some shareholders is not standardized and the equity relationship is not clear enough, the bottom line requirements of corporate governance are strengthened. Third, highlight the governance practice. In the near future, the CSRC will launch a two-year corporate governance special action, requiring companies to conduct comprehensive self-examination and strict rectification in accordance with regulatory requirements, so as to achieve the overall improvement of governance level.
3u3001 Enhance regulatory adaptability and optimize the environment for high quality development of listed companies
In order to improve the quality of listed companies, the enterprises themselves should bear the main responsibility. At the same time, capital market regulation should also be combined with the changes in the macroeconomic situation at home and abroad to enhance adaptability, constantly improve the basic system of stock issuance, merger and reorganization, delisting, etc., create a more market-oriented and legal environment, and support listed companies to become better and stronger.
Second, we should improve the market-oriented mechanism of M & A and give better play to the role of the main channel. From the global experience, M & A is an important driving force for the development and upgrading of enterprises. George Stigler, the Nobel Laureate in economics, once said that no large American company grew up through some kind of merger and acquisition. Since 1996, Microsoft has carried out more than 400 mergers and acquisitions of various kinds, with a transaction scale of more than 100 billion US dollars, realizing a major transformation from a small software company to a global technology giant. M & a supervision in overseas mature markets focuses on fair game rules, supports market players to fully play games, compacts the responsibilities of intermediary agencies, and investigates and punishes illegal behaviors according to law. To further improve the adaptability of Chinas M & a system under the dual cycle pattern, we should take the implementation of M & a registration system as the starting point, further improve the market mechanism, enrich the market tools, strengthen the supervision during and after the event, support the listed companies to strengthen the scale effect and coordination effect through M & A, and improve the operation efficiency.
Third, we should improve the normal delisting mechanism to achieve the goal of retiring steadily. Only when the listed companies have access to and exit from the market and the survival of the fittest, can the flowing water not be rotten and the household key will not be rusty; the only in but not out will distort the market valuation system, leading to adverse selection and bad money driving out good money. A few years ago, Chinas capital market is still in its early stage of development, with different understandings and imperfect delisting mechanism. From 2001 to 2018, there were only 6 delisting companies on average, with an average annual delisting rate of 0.36%; while the U.S. stock market reached 4%, 10 times that of China. There are two important reasons for the smooth delisting: one is that there are multiple exit channels, compulsory delisting only accounts for 5% of the market exit, and 95% of the market exits through privatization and restructuring; the other is that the judicial relief mechanism such as group litigation is relatively sound, which can effectively protect the legitimate rights and interests of investors. To improve the adaptability of Chinas delisting mechanism, it is also necessary to broaden diversified exit channels through restructuring, restructuring and delisting. At the same time, for the black sheep of serious financial fraud and the empty shell zombies who lose the ability of sustainable operation, we should strengthen the rigidity of delisting, and never allow prolonged delay. We will implement the new securities law, promote the representative litigation system of insurance institutions through typical cases as soon as possible, and achieve the dual objectives of clearing the market and protecting investors.
It is a big article to improve the quality of listed companies and help the capital market to serve the double cycle. Ill talk about that first.