Regulator: China's capital market in 2016 "stable, strict, progressive"

CSRC takes questions from reporters at at SCIO, February 26, 2017. [Photo: SCIO]

China's top securities regulator has vowed to maintain the stable development of the country's capital market while taking steps to further open it up to foreign investors.

The regulator has also vowed not to relax its crackdown on what it calls "barbarians and predators" in the stock market.

In summing up the performance of China's capital market last year, Liu Shiyu, chairman of the China Securities Regulatory Commission offered just three words: stable, strict and progress.

He said: "The first key word is 'stable'. Now looking back on what we achieved in 2016, I should say that we succeeded in that respect. Our policy expectation was stable; we had stable market performance; and we had stable pace of reform. The second key word is 'strict'. Over the past year, we exercised strict supervision and regulation in accordance with the law in all sectors."

Liu also said progress was made in series of fundamental reforms.

"The third key word is 'progress'. We have followed the direction of a market-based, law-based and international-oriented reform, focused on identifying and resolving problems, and strengthened a number of foundational mechanisms for the capital market."

The chairman said the stable growth of the capital market has substantially supported the real economic growth of the country.

He noted limiting or halting initial share sales in order to stabilize the secondary market doesn't "solve the problems of long-term healthy development of capital markets."

In 2016, 280 enterprises passed IPO auditing, and 248 enterprises were made public through IPO's and raised more than 163 billion yuan.

Listed enterprises refinanced over 1.3 trillion yuan and 261 listed enterprises saw an increase of 980 billion yuan in capital through acquisition and restructure.

The chairman also highlighted the significance of launching stock connects between Hong Kong and Shanghai and Shenzhen.

"The two-way opening-up strategy also yielded new fruits. The Shanghai-Hong Kong Stock Connect was further sophisticated, and the Shenzhen-Hong Kong Stock Connect was successfully launched. Bond institutions and exchanges also fulfilled their role in participating in the 'One Belt, One Road' initiative, with gratifying outcomes."

Liu Shiyu, chairman of the China Securities Regulatory Commission [Photo: NetEase]

However, the regulator said there was still no timetable for the launch of an international board that will allow foreign-invested enterprises to list shares domestically in China, adding that the rules involved were still being studied.

China's stock market is one of the world's biggest, but prices are volatile and complaints of insider trading and other abuses are common.

At Sunday's news conference, the regulator again urged market players to stop risky behaviors, especially "blind expansion".

The CSRC has recently pledged to target what it described as "barbaric" leveraged buyouts and to restrict excessive fundraising by some listed companies, with a focus on private share placements.

The chairman Liu said earlier this month that regulators would take down law-breaking financial tycoons, which he called "giant crocodiles".

In the past two days, two leading domestic insurers, Foresea Life and Evergrande Life, were punished for risky speculative trading in the stock market.

(CRI's Liu Mohan reporting)