http://www.bjreview.com FEBRUARY 13, 2020 BEIJING REVIEW 37
BUSINESS
development of innovation-oriented enterprises
since the biggest difference between these and
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during their lifecycles.
Traditional enterprises mostly experience
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which meets the requirements of indirect
financing risk control. In contrast, innovation-
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phase of their lifecycle and need to turn to di-
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O Yi Huiman, Chairman of China
Securities Regulatory Commission
(CSRC), announced nine policies and
measures to further the opening up of
the capital market at the 11th Lujiazui
Forum on June 13, 2019.
O The Shanghai-London Stock Connect
scheme was launched on June 17, 2019.
O China and Japan initiated cross-listing
of exchange-traded funds based on the
schemes of qualified institutional investors
on June 25, 2019.
O The Office of Financial Stability and
Development Committee under the State
Council announced on July 20, 2019, 11
policies and measures to further open up theĶQDQFLDOLQGXVWU\
O The CSRC convened a symposium
on comprehensively deepening reform
of the capital market and listed 12 priori-
ties on September 9-10, 2019. One of
the highlights wa s to accelerate high-
level opening up of the capital market, to
implement measures for the opening up
and to maintain financial security in an
open environment.
O On September 25, 2019, the State
Administration of Foreign Exchange an-
nounced the abolition of investment
quota restrictions for Qualified Foreign
Institutional Investors and Renminbi
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ing up of the capital market can promote multi-
tiered capital markets and expand financing
channels for them, which will help solve the
most urgent financing problems facing these
companies in their initial phase.A better environment
The opening up of the capital market can also
improve the market environment. Although
the domestic capital market has seen great
progress in recent years, there are still problems
such as Ponzi schemes in the primary market,
too many individual investors in the secondary
market and manipulation of accounting valua-
tion. Opening up can help improve the capital
market’s weak supervision system and address
problems caused by limited types of partici-
pants, incomplete information disclosure, and
unsophisticated laws and regulations.
In addition, a capital market needs diverse
investors. Opening up can improve the struc-
ture of the capital market by introducing foreign
institutions to optimize the structure of inves-
tors. The introduction of full-fledged market
rules and concepts can also put investment
concepts in the capital market in line with inter-
national markets, improve the risk awareness
of domestic investors and promote its sound
development in the long term.
Efforts to attract foreign funds into China’smarket will not only enhance the support of
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will also help address longstanding problems
like financing difficulties for domestic private
enterprises. Currently, Chinese private enterpris-
es, which are mainly small and medium-sized,
contribute more than 50 percent of China’s
tax revenue, over 60 percent of its GDP, more
than 70 percent of technological innovation
and more than 80 percent of urban employ-
ment. Therefore, private enterprises will play an
increasingly important role in driving China’s
high-quality economic development. Since the
greatest problem facing these enterprises is still
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open capital market can meet the financing
demands of private entities, provide appropri-
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between the old capital market and enterprises’
demands.
The opening up of the capital market can
also contribute to the internationalization of
the renminbi. As the yuan gets increasingly
internationalized, the demands for renminbi
assets in terms of volume, types and liquidity
will increase, thus requiring further opening
up of the capital market. The move can also
improve the participation of foreign capital
in domestic capital market activity and en-
hance demands for the yuan, promoting its
internationalization.QThe China-Japan ETF Connectivity scheme is launched
at the Shanghai Stock Exchange on June 25, 2019
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