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New Coordinate of China's Securities Market
March 15 saw the close of the widely attractive fourth session of the 9th NPC and the adoption of the Outline of the 10th Five-year Plan amidst the deputies' applause, marking the beginning of China's development in the next five years.
Many insiders have noticed that at Premier Zhu's press conference two foreign journalists raised questions on China's securities market, an unprecedented scene in previous news conferences held after the two sessions. China's securities market, as a new force in the global capital wave, has attracted worldwide attention.
Bonding Point of History and Reality
At the end of this February, the B-share market, which had all along been closed to Chinese residents, was formally opened to domestic investors. The British Economist commented that the move represented the first step taken by China's scattered markets in their advance toward a unified one. According to analyses by Chinese and foreign economists, the opening of the B-share market and China's WTO entry constituted an important step taken by China's securities market in the face of reality.
If one has a browses of previous government work reports published since the introduction of the reform and opening policy, one will find it not hard to grasp such a clue: Expositions relating to the capital market varies from year to year. The concepts of the securities market and stock exchange were clearly stated in the reports only after the beginning of the 90s. With the Securities Law put into effect on July 1, 1999, the securities market began to operate under a legal framework. In 2000, Premier Zhu stated in the government work report "We should further standardize and develop the securities market and increase enterprises' direct fund-raising proportion. We should perfect the stock issuing and listing system and support large and medium-sized State-owned enterprises in raising funds on the market", making a comprehensive exposition of the strategic concept on the development of China's securities market.
The newly passed Outline of the 10th Five-year Plan further clearly defines the tasks for China's securities market in the coming five years: Strengthening supervision over the securities market and increasing its transparency, standardizing and developing the securities market and gradually increasing the proportion of direct fund-raising. Accelerating the development of enterprise bond markets and industrial investment funds. Actively fostering securities investment fund, pension fund and insurance fund and other institutional investors.
It is unexpected that the Outline and the Premier's report put the "cultivation and development of the securities market" in the most important position in China's effort to establish a market economy and this is really inspiring, says Liu Hongru, first chairman appointed to China Securities Regulatory Commission (CSRC) and now an influential securities advisor.
From the hot spot of concern to the NPC deputies and CPPCC members, it is not hard for us to find the annotations on the "most important position". During the 10th Five-year Plan period, SOE reforms, hi-tech development, WTO entry, revamping of investment and financing systems, and large-scale development of west China-these are tasks requiring priority development, and the topics concerning these tasks discussed by the participants in the "two sessions" need the support of the securities market.
Xu Guanhua, minister of science and technology, says that the hi-risk, hi-benefit character of hi-tech industry per se determines it must rely on a risk investment market for support.
New Positioning, Fresh Starting
A heated debate centered around the securities market took place one after another from the north to the south during this Spring Festival, focusing on this question: What kind of stock market do we need?
"Development is an absolute principle", this is also applicable to securities.
Investors may clearly remember that in the past 10-year development of China's stock market, we have had both the experience of witnessing the booming stock market and the bitter experience of seeing the plummeting of stock indexes by several hundred points in a day. But why can the market continue to advance at a time when the strength for China's economic development is still limited?
Economists say that this can only be explained by using the important viewpoints as expounded in Premier Zhu's government work report: Solving problems cropping up in the course of our advance by persisting in employing the method of development. That is a strategic view concerning economic development during the Ninth Five-year Plan period, as a matter of fact, the securities market has all along been developing under the guidance of this strategic thinking.
In the opinion of economist Li Jiange, China is the only country in the world that has successfully introduced the stock market without adopting measures for large-scale privatization during an economic transitional period. This makes it easy to explain why it is necessary for China's securities market to spend 10 years of development to gradually rectify and standardize its operation, just as Professor Xiao Zhuoji has said: China's stock market bears a deep "birthmark" of the planned economy.
That is a fact. Development of the securities market has run through the line of improvement and rectification, the well-known eight Chinese-character principle "legal system, supervision, self-discipline and standardization". However, judged from the actual condition of the market, the decade-long standardization is not as good as desired.
CEO of Haier Group once said: "I cannot understand China's stock market." For stock prices are not linked with enterprises' performance and, strange enough, high prices all go to those rubbish stocks. Professor Wu Jinglian holds that the stock market is too speculative, and he is not the only person who holds this view.
Expert Lin Yixiang analyses the reason for the emergence of problems of one kind or another in this way: proper positioning remains the key link in market standardization and development. He said positioning should be set in accordance with the functions of the market itself, instead of using the purpose it is expected to achieve.
The year 2000 should be regarded as an unusual year for the securities market. Ms Yang, an investor in Beijing, said during an interview that the words of "small and medium stock players" have often appeared in newspapers. She added with emotion: People have at last really paid attention to the stock players. Stock buyers have enumerated these new phrases which were previously seldom heard in the market: Protecting the interests of smaller investors, CSRC not to control index, and striking at acts manipulating the stock market.
There is no market in the world economic scope which tries by hook or by crook to make money, says Liang Dingbang, advisor to CSRC. China should link its market with the world economy, otherwise, it would be difficult for it to keep its market going.
From the publication of a series of regulations and other documents, people can feel an unusual atmosphere--China's securities market has really embarked on the path leading to standardization.
By PD Online staff member Li Heng
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