Chinese Capital Markets Receive “Unprecedented Focus” from Beijing as Reform Commission Approves Key Measures


China’s reform authority has given the green light to new measures to shore up the operation of the country’s capital markets, with inside observers highlighting renewed focus on the sector infrastructure.

The 16th meeting of the Central Comprehensively Deepening Reforms Commission (CCDRC) held on 2 November approved a slew of key reform plans including two pertaining to Chinese capital markets – the “Implementation Plan for Strengthening Listed Company Market Withdrawal Mechanisms” (健全上市公司退市机制实施方案) and the “Several Opinions Concerning Lawfully and Strictly Striking Against Illegal Securities Activities” (关于依法从严打击证券违法活动的若干意见).

Securities Daily said that Implementation Plan is part of “breakthrough efforts to create mechanisms for the withdrawal of listed companies in China.”

From the start of 2019 until the end of September a total of 46 listed companies in China have withdrawn from trading by a range of methods, of which 24 were subject to mandatory withdrawals.

“The problem of difficult market withdrawal remains pronounced,” said Securities Daily.”Deepening of reforms of the market withdrawal system is needed, and should be one of the key points for comprehensive deepening of reforms of the capital market.”

According to the accompanying passage of the Several Opinions marks the start of “zero tolerance” for major breaches of securities laws in China.

The CCDRC called for “accelerated improvements to mechanisms for securities law enforcement, expansion of the vigour of the investigation and punishment of major legal infringement cases and strengthening of cross-border regulatory and enforcement coordination.”

An opinion piece by Zhao Yang (赵洋) published by the official news outlet of the Chinese central bank said that “capital market reform and development is receiving unprecedented emphasis.”

“A series of measures for the deepening of reforms have been unveiled in succession, with the goal of further improving a multi-tier capital market, and strengthening the effective use of the core function of capital markets,” wrote Zhao.

“The two measures approved by the CCDRC are the concrete embodiment of improvements to capital market infrastructure.”