Respected Chairman Huang Hongyuan, President Mark Makepeace, Distinguished guests,
It gives me great pleasure to join you at the Press Conference and Seminar on FTSE Russell's 2018 China A-Shares Evaluation Results co-held by the Shanghai Stock Exchange (SSE), the Shenzhen Stock Exchange and the FTSE Russell Index. On behalf of the China Securities Regulatory Commission (CSRC), let me begin by expressing warm congratulations on the opening of the conference and a sincere welcome to President Mark Makepeace who has overcome a long distance to be here.
President Mark Makepeace has just announced the official inclusion of A-shares in the FTSE Global Equity Index Series (FTSE GEIS). I'm delighted to be here, witnessing the successful inclusion of A-shares into the FTSE Russell Index. It is a milestone event in the internationalization progress of the Chinese capital market, which will further usher in long-term overseas capital and improve A-shares' investor structure and also further enhance the international level and resource allocation efficiency of the A-shares market. The CSRC has always welcomed and supported the inclusion of A-shares into the FTSE Russell Index, and FTSE Russell has made huge and highly-effective efforts towards it. The two sides have maintained regular contact and exchange, gradually intensified their efforts and efficiency, and made a series of achievements. Based on all previous work, the CSRC has recently proposed to adopt the A-shares' inclusion in the FTSE Russell Index as a key work of strengthening the opening-up of the Chinese capital market to be further advanced. FTSE's official announcement of including A-shares in its index today is the result of all previous work, and it is in the expectation of all parties.
The CSRC has earnestly implemented the spirits of General Secretary Xi Jinping's speech on expanding the opening-up of the financial industry and market at the Bo'ao Forum for Asia and the decisions and deployment of the Party Central Committee and the State Council. The CSRC has rigorously promoted the opening-up of the capital market and greatly increased the daily limit of Shanghai - Hong Kong Stock Connect and Shenzhen - Hong Kong Stock Connect. At the same time, the SSE and the SZSE have continued to improve the trading suspension and resumption system and the final-session trading mechanism. The total net flow from overseas capital to A-shares has reached RMB230 billion since the beginning of this year, showing overseas investors' optimism on the Chinese economy with broad basis, stable operation and timely risk control and their confidence in the Chinese economic prospects of its accelerated replacement of old growth drivers with new ones, its continuous quality improvement and its stable capital market development. I have met many investors from international institutions recently and learned that they support FTSE Russell to include A-shares as they have a long investment planning cycle, do not care much about the short-term performance of the market, and focus more on the long-term development of the Chinese economy and the long-term performance of the A-shares. We welcome these long-term investors to participate in the A-shares market and believe that the inclusion of A-shares in the FTSE Russell Index will help to boost this process. China is a country with high saving rate. Neither China nor the Chinese stock market is short of capital. What they lack is long-term capital, especially that with no need for the profit-loss calculation at the end of every year. We will realize the goal that long-term capital dominates the Chinese stock market. FTSE's decision today has drawn us closer to this goal.
Next, the CSRC will firmly and steadily promote the opening-up of the capital market in order by centering on the principal line of serving the real economy; we will keep improving the operation quality and international influence of the Chinese capital market; and we will maintain the sound and stable development of the Chinese capital market. On the one hand, we will earnestly research and resolve the concerns and demands of foreign investors, keep improving the cross-border trading system, optimize the connectivity mechanism, and complete the QFII rules revision together with relevant departments, so as to bring convenience for long-term overseas capital to expand the A-shares allocation. And we will speed up efforts to launch measures that bring convenience for overseas institutional investors to make use of domestic financial futures and other risk-avoiding tools and gradually satisfy their demands on risk management. On the other hand, according to the development of the Chinese capital market and its opening-up demands, we will coordinate to promote the reform of the fundamental systems in the capital market, such as those on trading suspension and resumption, information disclosure and trading settlement, and keep urging the Chinese capital market to be in line with the best international practices.
Distinguished guests, today is the 18th day of the 8th month in the Chinese lunar calendar, the best time to watch the tides of Qiantang River; 2018 is the 40th anniversary of the Chinese reform and opening-up policy and also represents a new start of the reform and opening-up course. Like the tides of the Qiantang River, the new round of reform and opening-up will undoubtedly push the Chinese economy to a new height.