The Shanghai Stock Exchange (SSE) successfully held the Second Trading China Conference for Foreign Investors (also the Eighth Foreign Investors’ Access to the SSE) on November 8, 2018. With the steadily opening-up of the Chinese capital market, international investors, especially long-term international institutional investors, have had growing attention and demands on the A-shares market. To better show the new achievements of the internationalization development of the Chinese capital market to international investors, further enhance their understanding on the Chinese capital market and keep optimizing the cross-border investment channel, the SSE has held the Foreign Investors’ Access to the SSE from time to time since 2014, witnessing the active participation of large numbers of international institutional investors. Up till now, the activity has been held for 8 times, and it has become a brand international promotion activity of the SSE and a successful practice of the SSE in exploring the internationalization development.
SSE President Jiang Feng was present and delivered a speech; Shen Bing, Director of the Department of International Affairs of the China Securities Regulatory Commission (CSRC), and Wu Jianli, Director of the Pension Management Department of the National Council for Social Security Fund, made a keynote speech; Sha Yan, Director of the Department of Fund and Intermediary Supervision of the CSRC, was present at the event. Also attending were nearly 200 investment and trading business heads from about 70 domestic and overseas large institutions, including BlackRock, Vanguard, Fidelity International, Noregs Bank, Alliance Bernstein, Schroders, Morgan Stanley, Union Bank of Switzerland, HSBC (China), China International Capital Corporation, CITIC Securities, Haitong Securities and BOC International.
Jiang Feng said in the speech that international investors’ involvement in the A-shares market is of great significance for the Chinese capital market to get mature and the SSE to march towards a world’s first-class exchange. The SSE has always paid attention to serving international investors and enabled more and more international investors to have deeper understanding on the SSE and the whole Chinese capital market through different ways and channels. In the new pattern of China’s overall opening-up, the SSE will continue to conform to the unified arrangement of the CSRC and the principle of “early rather than late and fast rather than slow”. It will fully accelerate the opening-up pace, steadily promote its internationalization development, keep expanding the width and depth of opening-up and promoting the connectivity mechanism of cross-border capital markets, carry out pragmatic cooperation with capital markets of the “Belt and Road” participating countries, and continue to explore and strengthen the communication and cooperation mechanism with overseas exchanges.
A total of 3 keynote speeches were presented at the activity. Shen Bing delivered a speech on “Expanding the Two-way Opening-up of Capital Market, Serving the High-quality Development of Economy” through video connect. He said that the two-way opening-up of the capital market can be manifested in the following 4 aspects: the first is the improvement of the fundamental systems of the capital market and the expansion and optimization of the cross-border investment channels; the second is the continuous enriching of internationalized futures products; the third is the continuous loosening of market access and the orderly promotion of the two-way opening-up of the financial industry; and the fourth is the cooperation of domestic and overseas exchanges. Next, the CSRC will protect the sound development of the capital market from three aspects – implementing policies, optimizing systems and cooperating in regulation.
The keynote speech “Practice of Pension Investment and Operation” by Wu Jianli introduced the basic situation of the investment and operation of pension in China and illustrated the investment operation strategy of pension and its significance. He believed that the idea of long-term investment, the cooperation with two-layer professional labor division, and the diversified investment are crucial to the pension operation.
Zhu Haiyang, General Manager Assistant of Tianhong Asset Management Corporation, made an introduction on the connotation and market practice of the pension investment security in China, enriching international investors’ understanding on the Chinese pension system.
The three topics of the roundtable forum are: first, the future development of the QFII/RQFII system and the see-through regulation of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect; second, the opportunities and challenges of WFOE and QDLP; third, the inclusion of international indexes and the connectivity. Representatives of the SSE, the Shenzhen Stock Exchange, Shanghai Lujiazui Financial City Development Bureau, domestic and overseas securities dealers, overseas funds companies, the world’s famous index companies, and global custodian banks and law firms interpreted the latest policies and development of the current capital market in China according to their own experience and corporate business growth.
The activity has been well received by domestic and foreign guests. Craig Verdon, Head of Asia Equities for Morgan Stanley, said: “The Trading China event has been a tremendous success in helping global investors better understand and appreciate the investment opportunities in China. The high caliber content has provided further insight into the opening of the capital markets, as well as deeper understanding of pension practices and the significant progress that is being made.”James Chatfield, Head of Equity Trading APAC & Sr Portfolio Manager said : “This flagship event at the Shanghai Stock Exchange is a great opportunity for global asset managers such as Vanguard to build upon our experience investing in the China A share market. Vanguard expects that the weight of China A-shares in global indices will continue to grow as market liberalization continues. We commend the Shanghai Stock Exchange for their ongoing focus on improving access and market structure, thereby enabling market participants to execute more efficiently for the benefit of investors.”Jackson Lee, Country Head of Fidelity International China, said, “Fidelity International has been in China for 14 years and witnessed the gradual opening-up and maturity of the Chinese financial market. The SSE is at the frontier of a series of reform measures. Fidelity International is confident in the prospects of the Chinese market.” LSEG global head of equities products and co-head of equity, funds and fixed income (secondary markets) Brian Schwieger, said: “We are delighted to attend this fantastic event and look forward especially to discussing the Shanghai-London Stock Connect scheme, which is yet another major step forward in China’s long-term vision to open up and integrate with global capital markets.