Opening the financial market
As the Belt and Road Initiative advances, financial institutions should better serve Chinese businesses going abroad. Chinese President Xi Jinping said at the conference that developing direct financing will be prioritized, while the indirect financing structure will be optimized.
As for direct financing, the establishment and improvement of the stock exchange market, Growth Enterprises Market board, National Equities Exchange and Quotations, regional equity market and equity crowdfunding market should be pushed forward. Efforts should be scaled up to develop a multi-level capital market. More efforts should be made to help qualified businesses to finance themselves on capital markets and expand their proportion and channels of direct financing. Meanwhile, investors’ legitimate rights and interests should also be safeguarded.
As for indirect financing, the real economy and financial consumers would be better served by accelerating the strategic transformation of major state-owned banks and developing small and medium-sized banks and private financial institutions.
Xi also said that China will further open up its financial market to promote the steady internationalization of the RMB and capital account convertibility. To this end, more Chinese firms should be supported and encouraged to expand business in overseas markets as China is expanding the scale of preferential loans and credit financing offered to developing nations. The government should also improve the connectivity of capital markets among participating nations of the Belt and Road Initiative and encourage the Chinese capital market to cooperate with foreign counterparts.
While encouraging Chinese financial institutions to set up overseas branches, China should also facilitate activities of foreign financial businesses in China. Mechanisms of Qualified Foreign Institutional Investors (QFII) and RMB QFII should be improved to relax restrictions on market access for foreign investors and expand Chinese investment in overseas markets. Qualified Chinese firms should also be encouraged to list abroad.