Financial reforms among leading topics

June 19, 2020

We begin with the Lujiazui Forum, where every year people look forward to remarks from China's top money experts, including the executive director of the Shanghai Advanced Institute of Finance. Yang Chengxi has the story.

At Shanghai's Lujiazui Forum, People's Bank of China Governor Yi Gang shed light on China's financial opening-up directions.

YI GANG Governor, People's Bank of China "Shanghai can experiment with a free conversion between the yuan and other currencies for trade and investments, as long as the operations do not breach money laundering, anti-terrorism financing and anti-tax evasion regulations."

Shanghai's many financial mechanisms continue to be reformed. Such things as exchange and payment systems, are vital financial infrastructure, says ex-Shanghai vice mayor Tu Guangshao.

TU GUANGSHAO Executive Director Shanghai Advanced Institute of Finance "These will provide very strong support for the financial market, both in terms of efficiency as well as coverage."

One of the aims of the reform over these mechanisms is to further attract foreign investment into the Chinese market. Investment quotas for Qualified Foreign Institutional Investors were lifted last year, and on Thursday, China issued a draft proposal that could lower barriers for foreign investment into A-share, by various means such as lowering the lock-in period from 3 years to 12 months.

YANG CHENGXI Shanghai "Another financial reform that's attracting discussion is the new STAR market, a stock board geared towards innovation firms. It was launched right here during last year's Lujiazui Forum and is now approaching its first anniversary."

In a forum panel, officials and heads of listed companies gathered to discuss the advantages of the new board, such as a much shorter IPO process. But the main hallmark of the STAR board, experts say, is a registration system.

TU GUANGSHAO Executive Director Shanghai Advanced Institute of Finance "Reform over the capital market is very important to Shanghai becoming a global financial center. The priority of reform now is a registration system."

It is expected to provide experiences for China's other boards to eventually transition from an approval system to a registration system. As of June 12th, 110 companies have listed on the STAR board. Yi Huiman, the chairman of the China Securities Regulatory Commission, said during the forum that the regulator will also push forward, among many things, a market-making mechanism, and an index for the new board. YCX, CGTN, SHANGHAI.