1. Chinas indirect financing has been dominant for a long time, with large stock, strong development inertia and service stickiness, and the market still has strong expectations for rigid cashing.
3. We will steadily implement the registration system with information disclosure as the core in the whole market, urge all parties to return to their positions and fulfill their responsibilities, make the market pricing mechanism more effective, truly give the right of choice to the market, and support more high-quality enterprises to finance and develop in the capital market.
4. We should effectively run the science and technology innovation board, highlight the characteristics of the gem, promote the reform of the main board (small and medium-sized board), deepen the reform of the new third board, enhance the ability of small and medium-sized enterprises, steadily carry out regional equity market system and business innovation pilot, and standardize the development of OTC market.
5. We should continue to optimize the mechanism arrangements such as refinancing, merger and reorganization, and equity incentive, and support listed companies to accelerate their transformation and upgrading and become better and stronger.
6. We will further improve the delisting system, smooth multiple exit channels, establish a normalized delisting mechanism, and strengthen the survival of the fittest.
7. We will promote the reform of listed companies, improve corporate governance, improve the transparency of information disclosure, give better play to the exemplary role of innovation leaders and industry leaders, and lead more enterprises to achieve high-quality development through direct financing.
9. The Interim Regulations on the management of private investment funds have been issued to guide them to continuously improve their professional operation level and compliance management awareness, effectively solve the prominent problems of pseudo private placement, quasi private placement and random private placement, and promote the healthy development of the industry.
10. We will vigorously promote the entry of long-term funds into the market, accelerate the construction of a market environment in which long-term funds are willing to come and stay, expand the strength of professional asset management institutions, and continuously promote the active allocation of various types of medium and long-term funds in the capital market.
The paper points out that the development of direct financing is an important mission of the capital market. Under the strong leadership of the CPC Central Committee and the State Council, in recent years, the reform and development of Chinas capital market has accelerated significantly. The establishment of the science and technology innovation board and the pilot registration system have been successfully implemented. A number of major reforms, such as the gem and the new third board, have been launched in succession. The opening-up has continued to deepen, and direct financing has shown a positive trend of accelerated development. By the end of September 2020, the stock of direct financing has reached 79.8 trillion yuan, accounting for 29% of the stock of social financing scale. Among them, during the 13th Five Year Plan period, 38.9 trillion yuan of new direct financing was added, accounting for 32% of the increase of social financing scale in the same period.
The article points out that the 14th five year plan period is the first five years for China to embark on a new journey of building a socialist modern country in an all-round way. Increasing the proportion of direct financing is of great significance for deepening the structural reform of the financial supply side, accelerating the construction of a new development pattern, and achieving higher quality, more efficient, fairer, more sustainable and safer development.
First, increasing the proportion of direct financing is an urgent requirement of service innovation driven development strategy. The Fifth Plenary Session of the 19th Central Committee of the Communist Party of China stressed that we should adhere to the core position of innovation in the overall situation of Chinas modernization drive, and take self-reliance in science and technology as the strategic support for national development. From the perspective of international experience, it is necessary to give full play to the unique role of direct financing, especially equity financing, risk sharing and benefit sharing mechanism, accelerate the formation of innovative capital and promote the close integration of science, technology, capital and industry.
Second, increasing the proportion of direct financing is a key measure to improve the market-oriented allocation of factors. The Fifth Plenary Session of the 19th Central Committee of the Communist Party of China put forward that we should improve the operating mechanism of factors, improve the trading rules and service system of factors. The development of direct financing can convert funds with different risk preferences and maturities into capital more accurately and efficiently, promote the collaborative agglomeration of factors to the most potential fields, improve the quality and allocation efficiency of factors, and promote the upgrading of industrial base and the modernization of industrial chain. From overseas experience, economies dominated by direct financing can often seize the opportunity in the transformation and upgrading of industrial structure, and the transformation process is more smooth and smooth.
Third, it is necessary to increase the proportion of direct financing to deepen the structural reform of the financial supply side. General secretary Xi Jinping pointed out that deepening the structural reform of the financial supply side should focus on the adjustment and optimization of the financial system structure. Chinas financing structure has long been dominated by indirect financing, and the proportion of credit assets in total financial assets exceeds 70%. Increasing the proportion of direct financing will help to improve the function of financial market, enrich the supply of financial services and products, improve the adaptability of the financial system, stabilize the macro leverage ratio, and better prevent and resolve financial risks.
Fourth, increasing the proportion of direct financing is an important way to build a new system of higher level open economy. Win win cooperation is still the mainstream of world economic development, and opening up has always been an important driving force for Chinas economic development. Under the impact of novel coronavirus pneumonia, international trade and investment have declined significantly, and the global supply chain of industrial chains has been obstructed, and both ends of supply and demand have been frustrated. We need to further open and coordinate the import and export chain in order to further strengthen the import and export financing system.
The development of capital market faces institutional and institutional obstacles
The paper proposes that the development of direct financing is rooted in the real economy. Novel coronavirus pneumonia is a major global change in the world. China has taken the lead in controlling the epidemic situation, the long-term trend of economic growth has been consolidated, and it has been steadily moving forward and upgrading on the track of high-quality development. During the 14th five year plan period, China will accelerate the construction of a new development pattern with domestic circulation as the main body and domestic and international dual circulation promoting each other, which provides valuable strategic opportunities for increasing the proportion of direct financing.
First, the real economy has huge potential. With the super large-scale market capacity, complete industrial system and more than 800 million labor force with continuously improved quality, Chinas industrial development and upgrading momentum is still strong, the potential of the real economy will be further released, and the demand for capital elements will be accelerated.
Second, the macro environment is generally better. Monetary, financial, industrial, regional and other macro policy coordination continues to strengthen, and the legal protection continues to strengthen, which is conducive to expanding the ecological system of direct financing is gradually forming.
Third, there is a strong demand for wealth management among residents. Chinas per capita GDP has crossed the $10000 threshold, and the middle-income group has more than 400 million people. The demand of residents to expand equity investment has increased rapidly, which has created important conditions for the capital market to play the role of wealth management and increase the proportion of direct financing.
Fourth, the international attraction of Chinas capital market has been increasing. With the continuous promotion of financial opening-up and comprehensive deepening of capital market reform, the domestic capital market is undergoing profound structural changes, and has increasingly become an important gravitational field of global asset allocation.
Six key tasks of increasing the proportion of direct financing
This paper proposes that we should focus on building a standardized, transparent, open, dynamic and resilient capital market, strengthen the functions of the capital market, give full play to direct financing channels, promote the coordinated development of investment and financing, and strive to improve the inclusiveness and coverage of direct financing.
First, we will comprehensively implement the stock issuance registration system and expand the direct financing access. The registration system reform is the bull nose project of capital market reform, and also the core measure to increase the proportion of direct financing. General secretary Xi Jinping has made many arrangements for the registration system reform of stock issuance. We should adhere to respect the basic connotation of the registration system, learn from international best practices, reflect Chinese characteristics and characteristics of the development stage, timely summarize the experience of the pilot registration system of the science and technology innovation board and the growth enterprise market, and steadily implement the registration system with information disclosure as the core in the whole market. At the same time, we will comprehensively promote the reform of basic systems such as issuance, listing and trading, and continuous supervision, and urge all parties to return to their positions and fulfill their responsibilities, so as to make the market pricing mechanism more effective, truly give the right of choice to the market, and support more high-quality enterprises to finance and develop in the capital market.
Second, improve the multi-level capital market system with Chinese characteristics and enhance the inclusiveness of direct financing. The key to increase the proportion of direct financing is to form a multi-level capital market system that adapts to the different financing needs of different types and different stages of development, and to enhance the universality of services. We should scientifically grasp the positioning of capital markets at all levels, improve the differentiated institutional arrangements, smooth the transfer mechanism, and form a market system with dislocation development, complementary functions and organic links. We will effectively run the science and technology innovation board and continue to promote key institutional innovation. We should highlight the characteristics of the gem and better serve the development of growth oriented innovative and entrepreneurial enterprises. We will promote the reform of the main board (small and medium-sized boards). We will deepen the reform of the new third board and enhance the capacity of small and medium-sized enterprises. We will steadily carry out regional equity market system and business innovation pilot, and standardize the development of OTC market. We should actively and steadily develop the financial derivatives market, improve the risk management mechanism, expand the market depth and enhance the development toughness.
Third, to promote the quality of listed companies and consolidate the cornerstone of direct financing development. The formation of a group of listed companies reflecting the requirements of high-quality development is an important part of improving the quality and efficiency of direct financing in the capital market. We should continue to optimize the mechanism arrangements such as refinancing, merger and reorganization, and equity incentive, and support listed companies to accelerate their transformation and upgrading and become better and stronger. We will further improve the delisting system, smooth multiple exit channels, establish a normalized delisting mechanism, and strengthen the survival of the fittest. We will promote the reform of listed companies, improve corporate governance, improve the transparency of information disclosure, give better play to the exemplary role of innovation leaders and industry leaders, and lead more enterprises to achieve high-quality development through direct financing.
Fifth, accelerate the development of private equity funds and highlight the strategic role of innovative capital. Private equity fund is an important force of direct financing. By the end of September 2020, nearly 15000 equity and venture capital fund managers have been registered and registered, with an accumulated investment of more than 10 trillion yuan, playing an increasingly important basic and strategic role in supporting scientific and technological innovation. It is necessary to further increase support, actively broaden the source of funds, smooth the links of investment, management and withdrawal, and encourage private equity funds to invest in small, early, and science and technology. The Interim Regulations on the management of private investment funds have been issued to guide them to continuously improve their professional operation level and compliance management awareness. We should speed up the establishment of a risk handling mechanism of inter ministerial linkage and central local cooperation, effectively solve the prominent problems of pseudo private placement, quasi private placement and random private placement, and promote the healthy development of the industry.
Sixth, we should vigorously promote the entry of long-term funds into the market, and make full use of direct financing. The proportion of long-term capital is an important factor affecting the stability of capital market, and it is also one of the core variables determining the proportion of direct financing. It is necessary to speed up the construction of a market environment in which long-term funds are willing to come and stay, strengthen the strength of professional asset management institutions, vigorously develop equity fund products, and continuously promote various medium and long-term funds to actively allocate the capital market. We should increase policy preference and guidance, steadily increase long-term performance-oriented institutional investors, and return to the important concept of value investment. We will encourage excellent foreign securities fund institutions to develop their business in China and promote healthy competition in the industry.
Three aspects to improve the proportion of direct financing
The paper points out that increasing the proportion of direct financing is a systematic project. It is necessary to strengthen overall planning from the perspective of the overall economic and financial situation, and give full play to the joint efforts of market participants, regulatory agencies, macro management departments and news media.
First, promote the coordinated development of direct financing and indirect financing. The promotion of the proportion of direct financing is inseparable from the same direction of reform in the field of indirect financing. We should improve the formation and transmission mechanism of market-oriented interest rates, improve the effectiveness of financial asset pricing, and increase the attractiveness of direct financing. We will implement the new regulations on asset management, unify regulatory standards, and promote the industry to return to its original source and develop healthily.
Second, further improve the supporting system of direct financing. We should strengthen the top-level design and improve the basic systems and key policies of accounting, auditing, finance and taxation that are conducive to expanding direct financing and encouraging long-term investment. We will open the market to the outside world at a high level, broaden the channels for foreign investors to enter the stock and bond markets, and enhance the convenience of foreign investment participation. We should improve the statistical system, build a hierarchical, classified and scalable direct financing statistical index system to better reflect the real composition and development trend of social financing.
The third is to build a good market ecology conducive to increasing the proportion of direct financing. We should adhere to the market-oriented and rule of law orientation, take the full implementation of the new securities law as an opportunity, implement the zero tolerance requirement, strengthen the coordination of legislation, administration and justice, improve the three-dimensional and organic system of mutual convergence and mutual support of administrative law enforcement, civil recovery and criminal punishment, and earnestly increase investor protection, enhance investor confidence, and promote a virtuous market cycle.