SCIO briefing on actively encouraging the flow of medium- and long-term funds into the capital market and promoting its high-quality development

Phoenix Satellite Television:

Foreign capital is an important force of medium and long-term funds. What are the arrangements for attracting and facilitating foreign investment in the A-share market in the next stage? Thank you.

Wu Qing:

Thank you for your question. Opening to the outside world is a basic state policy that China has long adhered to, and a defining feature of Chinese modernization. In recent years, the CSRC has resolutely implemented the arrangements of the state on financial opening up, continuously improved policies for foreign investment in the capital market, and advanced two-way opening up in terms of markets, products, and institutions. We have continuously relaxed access requirements for qualified foreign institutional investors (QFIIs) and expanded their investment scope. We have optimized the filing-based system for overseas listings, improved the coordination mechanism for domestic and overseas listings, and expanded cross-border connectivity in the capital markets in an orderly manner. Our efforts have facilitated the inclusion of A-shares in major indices worldwide such as MSCI, FTSE Russell, and S&P Dow Jones. We have also supported more foreign financial institutions in operating businesses in China. To date, 26 foreign-controlled or wholly foreign-owned financial institutions, such as securities companies, fund management companies, and futures companies, have been approved and established. Overall, as foreign investment in the A-share market becomes increasingly convenient and stable, a favorable ecosystem for foreign participation in China's capital market is taking shape.

In terms of foreign participation in A-share market investments and transactions, as of the end of last year, 866 QFIIs had obtained investment qualifications, and foreign investors held approximately 3 trillion yuan worth of A-shares through QFII, Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect. It is fair to say that foreign capital is currently one of the important sources of funds in the A-share market. A considerable part of foreign capital is medium- and long-term funds, including many globally renowned sovereign wealth funds, pension funds, public offering funds, and commercial insurance funds. These investors have actively participated in the A-share market for many years and contributed to the stable development of the capital market.

I would like to emphasize that the CSRC remains committed to market-oriented, law-based, and internationalized reforms, while ensuring the unity of reform and opening up. We are dedicated to creating a beneficial and facilitative investment environment for international investors whilst supporting various foreign organizations' involvement in the A-share market. China's capital market will only open wider to the rest of the world. In the next stage, we will resolutely implement the guiding principles of the third plenary session of the 20th Central Committee of the Communist Party of China and the central financial work conference, especially the arrangements on steadily expanding financial opening up. We will further enhance the stability, transparency, and predictability of our policies, further facilitate cross-border investment and financing, and enhance the attractiveness of A-share investment. We will, first, further optimize the QFII system and improve the capital market connectivity mechanisms; second, enrich cross-border investment and risk management products; third, continuously strengthen communication with international investors, promote the resolution of foreign investment institutions' concerns and reasonable demands, and further refine relevant mechanisms; fourth, enhance regulatory capacities under the condition of opening up the capital market further to maintain stable market operation.

China has bright economic prospects and immense capital market potential. We welcome more foreign investment in the A-share market to share in the opportunities presented by China's economic and capital market reform and development. Thank you.

Shou Xiaoli:

Thank you to all our speakers and to all the journalists for your participation. This concludes today's press conference. Goodbye, everyone.

Translated and edited by Liu Caiyi, Yan Xiaoqing, Yang Xi, Xu Kailin, You Jiaxin, Dong Qingpei, Zhang Jiaqi, Yuan Fang, Liu Qiang, Gong Yingchun, Ma Yujia, Huang Shan, Li Huiru, Wang Qian, Wang Yanfang, David Ball, Jay Birbeck and Tudor Bentley Finneran. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.