Financial reforms in focus at forum

Continued efforts will be made to advance China's high-standard financial opening-up and improve the financial sector's support for the real economy, especially new quality productive forces, the country's top financial regulators said at the twoday Lujiazui Forum which opened in Shanghai on Wednesday.

During his keynote speech at the forum's opening ceremony, Wu Qing, chairman of the China Securities Regulatory Commission, the country's top securities watchdog, announced eight additional reform measures for the technology-focused STAR Market of the Shanghai Stock Exchange, which is positioned to nurture "hard technologies" such as integrated circuits and biomedicine.

The new measures will deepen existing reforms and are projected to further nurture technology innovation and the development of new quality productive forces. They will focus on the completion of the basic mechanism for issuance, underwriting, mergers and acquisitions, restructuring, equity incentives and trading, he said.

The STAR Market-based product portfolio will be enriched through measures like the launch of more index-based products and the introduction of more exchange-traded funds. Efforts will be made to launch futures and options based on the STAR Market 50 Index when appropriate, according to the eight new measures released on Wednesday.

The CSRC encourages the integration of listed companies to ensure that such companies fully use equity, cash, directional convertible bonds and consideration structures in share purchases for M&A activities, said Wu.

Li Yunze, head of the National Financial Regulatory Administration, said the NFRA will work with the Shanghai municipal government to introduce a guideline to develop the reinsurance industry in the city. Insurance capital will make experimental attempts to invest in gold contracts traded on the Shanghai Gold Exchange.

The NFRA will also seek to relax the scope of foreign shareholders for non-bank financial institutions in China. Insurance capital should play a bigger role in supporting the development of strategic emerging industries, advanced manufacturing, "new infrastructure" and venture capital, he said.

"New infrastructure" refers to information technology-based infrastructure, covering seven major areas: 5G base station construction, ultra high voltage, intercity high-speed railway and urban rail transit, new energy vehicle charging piles, big data centers, artificial intelligence and industrial interconnection.

The capital management regulations for qualified foreign institutional investors and renminbi qualified foreign institutional investors are being revised to make them simpler and more complete, said Zhu Hexin, head of the State Administration of Foreign Exchange, in a message released on Wednesday.

While domestic institutions are supported to conduct cross-border investment, multinational companies are encouraged to set up global or regional treasury centers in Shanghai, said Zhu.

The regulated development of cross-border investment businesses of equity investment funds should be advanced. Technology companies' cross-border financing should be also expanded, he said.

Trading of government bonds in the secondary markets will be gradually included in China's monetary policy toolbox, Pan Gongsheng, governor of the People's Bank of China, the country's central bank, said during the forum's morning session on Wednesday. This will be part of the PBOC's efforts to further improve the market-based interest rate control mechanism.

But Pan clarified such trading is not quantitative easing. It is positioned as a channel for the base money injection and a liquidity management tool.

Such trading includes both buying and selling of government bonds and, combined with other tools, is expected to help create a suitable liquidity environment, he said.

Inaugurated in 2008, the Lujiazui Forum is an annual industry pageant where government officials, financial regulators, market mavens and scholars exchange views on hot topics.

During the opening ceremony on Wednesday, the International Monetary Fund unveiled its Shanghai regional center, which is expected to strengthen the multilateral institution's communication and cooperation with Asia-Pacific economies. The center will carry out research on sectors that attract the most attention among emerging markets and middle-income countries.