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Speech by CSRC Vice Chairman Jiang Yang on 2017 CCTV Financial Forum and Chinese Listed Companies Summit
13-12-2017

Dear guests and friends,

 

It gives me great pleasure to attend today's Forum. I'd like to congratulate on the successful convening of the Forum on behalf of the China Securities Regulatory Commission (CSRC).


Laying out a comprehensive roadmap for the great cause of building socialism with Chinese characteristics, the 19th National Congress of the Communist Party of China (CPC) formally endorsed the political judgment that socialism with Chinese characteristics has entered a new era, established the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the fundamental guidance for the CPC to uphold into the far future, set out the core strategies to develop socialism with Chinese characteristics in the new era, and laid out the objectives to secure a decisive victory in building a moderately prosperous society in all aspects and embark on the journey to fully build a modern socialist China. At the moment, a study campaign is well underway in the CSRC system to earnestly promulgate and carry out the spirits of the 19th CPC National Congress, especially General Secretary Xi Jinping's profound insights in his series of discourse on the capital markets, in an effort to steadily promote reform and open-up of the capital markets in the new era.


In the year of 2017, the CSRC firmly implemented the decisions and plans by the Party Central Committee and the State Council for the capital markets, put into actions the spirits of the National Financial Work Conference with firm commitments to the underlying principle of pursuing progress while ensuring stability, the new development philosophy, and the vision of making people-centered development, remained focused in the development direction of serving the real economy, and strove to live up to the ultimate regulatory mission of protecting investors' legitimate rights and interests, making continuous efforts in law-based, comprehensive, and strict regulation to improve corporate governance of listed companies and promote sound development of the capital markets.


First, holding high standards for new IPO entrants to uplift the quality of listed companies from the beginning. We continue to maintain a normal pace of IPOs with further optimized approving process and enhanced efficiency. In the first 11 months of this year, a total of 386 companies have been approved for IPOs, ranking top globally in IPO numbers and funds raised. The process for IPO approvals has streamlined and thus effectively eased pressure from the queue of IPO applicants. In the meantime, rules on new share flotation, pricing, and rights issue were optimized. Under a stricter charter, the Public Offering Review Committee now operates with greater transparency in a tripod model in which panelist selection, oversight, and the Committee's day-to-day operation are separated. IPO reviews have been further strengthened to allow in only the high-quality enterprises and bar the inferiors at the doorstep. In the past five years, the number of listed companies have increased from around 2,400 to more than 3,400. A large group of innovation-driven companies with high growth potentials have progressively  ascended to be the vital force of the capital markets. The sharp increase of listed companies from strategic emerging industries have created significant clustering effect, drawing in more high-quality companies to benefit from the capital markets. Practices have proven that "flowing water at springhead keeps a river running clean and clear". As the cornerstone of the capital markets, listed companies representing the future of the industry and core economic competitiveness will aggregate in and empower the capital markets to better serve the supply-side structural reform.


Second, facilitating M&As of listed companies to serve the real economy effectively and efficiently. As a result of the CSRC's continued efforts invested in streamlining administration and delegating powers, over 90% of M&A deals nowadays are initiated and concluded by the listed companies on their own, in alignment with the goal of industrial integration and economic transformation and upgrading. By the end of October 2017, there has been over 2,000 M&A deals in the market as an important approach to step up improved distribution, structural adjustment, and strategic reorganization of state-owned sector. In the past year, state-controlled listed companies conducted over 530 M&A deals which effectively consolidated resources and production capacities of central and local state-owned enterprises, as well as enhanced industrial concentration and core competitiveness. For instance, the merger of AVIC Heibao and Shenyang Aircraft Corporation greatly bolstered aircraft manufacturing on industrial scale. Nanyang Technology transformed into drone business after acquiring assets from the CASIC. Meanwhile, we strengthened regulation and enforcement to forestall hustling, herding, and aimless cross-sector acquisitions. Among the concluded M&A reviews, the rising portion of horizontal and vertical M&As underscored the positive guiding impact of regulatory policies on the market. By way of M&A and relisting, qualified companies of high grade could thrive to be stronger, better, and bigger, which in turn curtailed speculation on shell companies and drives valuation to market norms. At the same time, Xintai Electric and Xindu Hotel were smoothly delisted, augmenting public confidence in the market selection of the best.


Third, adopting the new vision of development and working hard for better quality, higher efficiency, and more robust drivers of economic growth through reform. Policy support has been allocated in reaction to the innovation-driven development strategy with differentiated regulatory requirements on information disclosure to energize high-tech companies and nurture new growth momentum. At present, a third of all listed companies belong to strategic emerging industries, totaling over 1,100 companies. From early 2016 to end of October 2017, a total of 495 high-tech companies have gone public, accounting for 82% of the total 605 new listings in the same period. In the battle against poverty, a fast-track policy was applied to IPOs, bond issuance, and M&As of companies from impoverished regions. By requiring listed companies to disclose corporate efforts in relation to poverty alleviation, the CSRC encourages them to fulfill corporate social responsibilities and devote to the great cause of targeted poverty reduction and alleviation. In serving the green development strategy, the CSRC and the Ministry of Environmental Protection entered into a strategic cooperation agreement to establish a compulsory disclosure requirement on environmental information for listed companies, urging them to meet their due obligations of environmental protection. In order to build an open economy of higher standards, the CSRC is committed to furthering two-way opening up of the capital markets, lauding A-share addition into MSCI emerging market indices with 222 listed companies included as a start. The CSRC's presence on the OECD Corporate Governance Committee will bring in international experiences to improve corporate governance of domestic listed companies. In honor of people-centered development thought, we have endeavored to reform shareholding reduction rules for large shareholders of listed companies, requiring them to sell shares in an orderly and prudent manner while promoting sound corporate development for the benefit of minority shareholders and the health of the capital markets. With intensified regulatory discipline, the listed companies are urged to increase cash dividend and optimize investor return mechanism. In carrying through with the new vision for development, listed companies are now growing for the better in quality and profitability. In the first three quarters of 2017, the aggregate revenue and net profit of listed companies grew by 21.8% and 20.1% respectively, compared with those in the same period of last year.


Dear guests and friends,


As socialism with Chinese characteristics has entered a new era, we are in the critical stage to secure a decisive victory in building a moderately prosperous society in all respects, to deliver on the two centenary goals, and to realize the Chinese Dream of national rejuvenation, all of which are intertwined with reforms to develop the socialist market economy. Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era not only sharpens our minds, but also guides our actions to advance reform and open-up of the capital markets, building China's strength in the international community. Forging ahead, the CSRC will fully implement the decisions and plans by the 19th CPC National Congress to firmly fulfill the three missions of serving the real economy, preventing financial risks, and deepening financial reforms, steadily increase direct financing, continuously promote market-oriented reforms of stock offering and M&A, vigorously cultivate exchange-traded bond market, and expand multi-tiered, diversified, and complementary financing channels, developing the multi-tiered capital markets catering to the multifold financing needs in the real economy. In the meantime, the CSRC will move ahead with law-based, comprehensive, and strict regulation while further opening up the capital markets, striving to create even better prospects and greater achievements in the new era.


Listed companies are the most dynamic and efficient drivers of national economy, who are also the pathfinders to rejuvenate the Chinese nation. The 19th CPC National Congress has rendered a master plan for all aspects to promote socialism with Chinese characteristics in a new era, ranging from economy, politics, culture, society, to environment. With presences on all fronts and in all industries, listed companies should learn word by word and internalize the spirits of the 19th CPC National Congress, truthfully take actions to improve quality of growth, and actively fit into the overall national development strategies. Meanwhile, listed companies should stay true to founding mission and faithfully carry out the new strategies and plans put forward by the 19th CPC National Congress. First, spontaneously follow Party leadership and closely align with the Party Central Committee with Xi Jinping at the core in terms of political stance, direction, principle, and path, defending and holding the authority in reverence. Second, stay focused on main business and strive to be world-class enterprises with enhanced capabilities in independent innovation and service. Third, fortify compliance with laws and regulation and pull up business integrity, abiding by all regulatory rules and obligations of information disclosure and restraining from market abuses such as excessively frequent financing, speculations on concepts, aimless and sham M&As, and rule-defying shareholding reduction, etc.. Fourth, hold shareholders' interests with supremacy and continue to optimize investor return, gradually nurturing sound and rational equity investment culture while protecting the legitimate rights and interests of minority investors.


As the old saying goes "If you want to go fast, go alone. If you want to go far, go together". The capital markets are like a garden of flowers, where listed companies and all participants collectively share the benefits but also jointly take the duties as gardeners. We sincerely hope that listed companies, financial institutions, investors, media, as well as government authorities would act in concert to keep upgrading the quality of listed companies and build multi-tiered capital markets that are internationally competitive, making new and great contributions worthy of the time, in the history, and for the people. Last but not least, I wish the Forum and Summit a full success. Thank you all!

 



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