Shanghai Stock Exchange Commits to Further Opening of China’s Capital Markets Following Agreement with Japan

The Shanghai Stock Exchange has reiterated its commitment to further opening of the country’s capital markets following the recent signing of a key cooperative agreement with Japan.

Liu Shiyu  (刘士余), chair of the China Securities Regulatory Commission, recently met with the Japanese finance minister in Beijing to sign the “China Securities Regulatory Commission and Japanese Finance Minister Memorandum of Understanding on Expediting Securities Market Cooperation Between the Two Countries” (中国证监会与日本金融厅关于促进两国证券市场合作的谅解备忘录).

The signing coincided with the execution of memorandums of understanding between the relevant bourses and industry associations of both China and Japan to strengthen cooperation between both sides.

“In future the Shanghai Stock Exchange will continue to strengthen cooperation and exchange with overseas stock exchanges, explore innovative models for cooperation between domestic and overseas capital markets, and pragmatically advance the bidirectional openness of China’s capital market,” said an official from the SSE to state-owned media in the wake of the signing.

Domestic observers expect the opening of China’s capital markets to further accelerate with measures such as the launch of Shanghai-London Stock Connect, leading to a sharp increase in their international influence.

“Shanghai-London Connect is of benefit to expanding the bidirectional openness of China’s capital markets, raising the depth and internationalisation of domestic markets, driving the cross-border expansion of the securities operations of domestic securities firms, and increasing the international competitiveness of the securities sector,” said the aforementioned SSE official.

“[It] will provide convenient opportunities for issuers and investors from either location to enter the financial markets of their counterparts, enable domestic residents to invest in overseas products via their own local markets; support A-share listed companies in obtaining funds from overseas markets, and support cross-border financing, mergers and acquisitions by the real economy.”

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