Chinese regulator assures readiness for financial markets deregulation
Finance | 29 May 2018 1:15 pmChina will aim to maintain the stability of financial markets and prevent asset price bubbles amid deregulation, a senior securities regulator said at a financial forum in Shanghai.
Reuters cited Fang Xinghai, vice chairman of the China Securities Regulatory Commission as saying: "Currently, global institutional investors are generally underweight Chinese assets. With China’s rising economic clout, and the growing importance of the renminbi, increasing foreign inflows will be the norm.
"Under such circumstances, it’s important to maintain stability of the financial markets ... and ensure there are no price bubbles in various financial assets including stocks, bonds, loans, and derivatives.”
Fang said financial deregulation in other developing countries has offered China a wealth of lessons.
"If financial markets are healthy, short-term fluctuations in cross-border capital flows would not turn into a lasting tide, so that disturbance to the [domestic] financial system is temporary and limited. Otherwise, a small, unexpected incident could potentially destroy an edifice built on sand.”
Underscoring regulators’ commitment to further opening, Fang said a planned stock link between Shanghai and London is on track.
CSRC is "working hard” on the Shanghai-London Stock Connect, and aims to roll out the first product under the scheme by the end of this year, he said.
Meanwhile, overseas-listed Chinese tech firms will soon issue China depositary receipts (CDRs) on Shanghai and Shenzhen bourses, Fang said.
Commenting on the MSCI entry, which will see 234 China-listed big cap stocks included in MSCI’s emerging markets benchmark on June 1, Fang said "China’s stock market will embrace the most forceful and sustainable participation from global institutional investors.”
