The China Securities Regulatory Commission (CSRC) has stressed the need for both further reform of China’s capital markets as well as maintaining the leadership role of the Communist Party of China (CPC) at its 2023 systemic work conference held on 2 February.
At the conference, CSRC officials called for “the establishment of a modern capital market with Chinese characteristics,” referring to this mission as the “obligatory duty for Chinese-style modernisation, and the intrinsic requirement for effectively pursuing the path of financial growth with Chinese characteristics.”
CSRC highlighted four key work points for reform efforts in 2023, including:
- Strengthening the Party’s overall leadership over the capital market. “Under the centralized and unified leadership of the Party Central Committee, the power of the market and the role of the government must be organically combined to effectively improve the governance efficiency of the capital market.”
- Adhering to “system development, non-intervention, and zero tolerance. “Actively implementing the regulatory concept of ‘respecting the market, respecting the rule of law, respecting professions, respecting risks, and exerting the joint efforts of all parties’ to comprehensively promote regulatory transformation and drive comprehensive improvements to the ecological system of the capital market.”
- Strengthen the concept of the system, upholding dialectics and “two-point theory.” ‘Maintaining focus, striving over a long period and scientifically handle the relationships between growth and security, present and long-term concerns, overall circumstances and specific details, and seeking the largest common denominator during the process of comprehensive balancing.’
- Highlighting “human effort”, and better combining incentives and responsibilities with strict management and supervision. Effectively using and leading teams, and continually creating new work conditions while endeavouring firmly and overcoming difficulties.
CSRC also highlighted a series of six goals for policy work 2023, including:
- Steadily increasing the proportion of direct financing. Focusing on the key to supporting technological innovation, coordinating the development of a multi-tier market system; coordinated the development of the stock market and the bond market, coordinating the dynamic balance of the primary and secondary markets, and further smoothing the virtuous circle of “technology-industry-finance”.
- Driving the cultivation of a group of listed companies that reflect the needs of high-quality development. Focusing on the development of a modern industrial system, and earnestly implementing the “two unwaverings.” Improving market-oriented incentive and restraint mechanism, strengthening joint efforts to promote improvements to the quality of listed companies, and vigorously improving the service capabilities for enterprises of various ownerships, types, and sizes.
- Promoting the scientific effectiveness of valuation and pricing. Deeply grasping factors such as China’s industrial development traits, systemic traits, as well as the sustainable development capabilities of listed companies, and promoting relevant parties to strengthen research and development and the commercialisation, as well as gradually improving the valuation and pricing rationale for different types of enterprises and the valuation system with Chinese characteristics, in order to to better fulfil the resource allocation role of the capital market.
- Further improving long-term mechanisms for capital market risk prevention and control. Paying close attention to the correlations between and systematic nature of various financial risks; strengthening the prevention and resolution of cross-market, cross-industry and cross-border risks, and continuously improving the capital market’s risk prevention, early warning, and accountability systems.
- Better protecting the legitimate rights and interests of small and medium-sized investors. Firmly establishing the concept of “major insurance”, promote the strengthening of administrative law enforcement, civil compensation, and criminal accountability mechanisms. Unblocking the channels for investors’ rights protection and relief, and actively exploring more diverse paths and methods to improve the sense of well-being amongst small and medium-sized investors.
- Accelerating the creation of the trinity of “governance, ecology, and culture” as the soft power of the capital market. Better combining the strengthening of the party’s leadership with administrative supervision, industry self-discipline, and market autonomy, and continuing to maintain a healthy market ecology and culture, in order to make the capital market more healthy and full of vitality.