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Cailianshe News, July 21 (Reporter Lin Jian)The specific reform guidelines that all sectors have been looking forward to have been officially released. From July 15 to 18, 2024, the Third Plenary Session of the 20th CPC Central Committee was held in Beijing, and the "Decision of the CPC Central Committee on Further Comprehensively Deepening Reforms and Promoting Chinese-style Modernization" was reviewed and approved. The full text of the "Decision" was released on July 21. The "Decision" puts forward a more detailed discussion on further comprehensively deepening reforms and promoting Chinese-style modernization.

Overall, the Decision has new terms and positive signals, with 15 chapters, 60 articles and more than 20,000 words. Cailianshe reporters found that the capital market was mentioned five times, mainly in chapters such as "improving the system and mechanism for promoting high-quality economic development" and "improving the macroeconomic governance system". After breaking down the full text, there are 10 terms related to capital market reform.

1. Improve the basic system to promote the standardized development of the capital market.

2. Improve the capital market function of coordinating investment and financing, prevent risks, strengthen supervision, and promote the healthy and stable development of the capital market.

3. Support long-term funds to enter the market.

4. Improve the quality of listed companies and strengthen the supervision of listed companies and delisting system.

5. Establish a long-term mechanism to enhance the inherent stability of the capital market.

6. Improve the behavioral norms and constraints mechanism for major shareholders and actual controllers.

7. Improve the dividend incentive and constraint mechanism for listed companies.

8. Improve investor protection mechanisms.

9. Promote the alignment of regional equity market rules and the unification of standards.

10. Among the measures to steadily expand institutional opening-up, there is a clear mention of "orderly expanding the opening-up of my country's capital market."

The capital market is the product of reform and has been growing stronger in the process of reform. This plenary session has made clear arrangements for comprehensively deepening the reform of the capital market. From the perspective of the Decision, the institutional construction, function, opening up and internal stability of the capital market are all key points in the text. In addition, the entry of long-term funds into the market, the standardized management of listed companies (including actual controllers, dividends, etc.), and investor protection, which are of great concern to all parties in the market, are all mentioned in this Decision. The Decision shows that reform and opening up are only in progress, not completed, so the reform of the capital market is highly anticipated.

Looking at the Decision as a whole,The functionality of the capital market is reflected in every detail, especially in supporting industrial and technological development, etc., which all mention the importance of investment and financing functions.

Yan Xiang, chief economist of Huafu Securities, said that the capital market has a unique and important function in serving the real economy, which enables it to play a big role in supporting technological innovation, developing new productivity, and doing a good job in the "five major articles". The "Decision" proposes to "improve the basic system to promote the standardized development of the capital market" and "improve the capital market function of coordinating investment and financing", with the aim of better playing these important functions of the capital market.

He also said that the "Decision" proposed to "prevent risks, strengthen supervision, and promote the healthy and stable development of the capital market" and "establish a long-term mechanism to enhance the inherent stability of the capital market." The purpose is to establish the internal institutional foundation for the long-term and stable development of China's capital market through reform.

On July 19, Wu Qing, Secretary of the Party Committee and Chairman of the China Securities Regulatory Commission, presided over a Party Committee (expanded) meeting to convey and study the spirit of the Third Plenary Session of the 20th CPC Central Committee and study implementation measures. The meeting made it clear that the China Securities Regulatory Commission system should emphasize strengthening its foundation, strict supervision and management, adhere to reform to promote stability, promote development, improve services, and strengthen the team, and unswervingly push forward the comprehensive deepening of capital market reform, enhance the inherent stability of the capital market, enhance the inclusiveness and adaptability of the capital market to technological innovation, strengthen the full-chain supervision of listed companies, vigorously strengthen investor protection, and strengthen regulatory accountability. These measures and formulations have been very obvious this year, and the policy documents issued one after another have revealed the clarity of the main line of supervision.

Yan Xiang believes that using reform to help the capital market develop in a stable, healthy and high-quality manner will not only improve the efficiency of the capital market and enhance investor confidence, but will also effectively coordinate individual financial risks and reduce risks in the overall economic system, which will be conducive to maintaining the sustained and stable development of the social economy.

All financial activities are regulated according to law

Reforms affect the entire system. The capital market is a key part of finance and a part of the macroeconomy. A closer look at the "Decision" on finance shows that the references to finance are more distinct and prominent, which is concentrated in the single chapter "Improving the Macroeconomic Governance System" and is also inseparable from the capital market and interconnected.

The Decision mentioned that scientific macroeconomic regulation and effective government governance are the inherent requirements for leveraging the advantages of the socialist market economy system. It is necessary to improve the macroeconomic regulation system, coordinate and promote reforms in key areas such as finance and taxation, and enhance the consistency of macroeconomic policy orientation. The reporter found that the following contents are worthy of attention:

Include both economic policies and non-economic policies in the assessment of consistency of macro-policy orientation.

Deepen financial system reform. Accelerate the improvement of the central bank system and smooth the monetary policy transmission mechanism. Actively develop science and technology finance, green finance, inclusive finance, pension finance, and digital finance, and strengthen high-quality financial services for major strategies, key areas, and weak links. Improve the positioning and governance of financial institutions, and improve the incentive and constraint mechanism for serving the real economy. Develop diversified equity financing, accelerate the development of a multi-level bond market, and increase the proportion of direct financing. Optimize the management system of state-owned financial capital.

Formulate financial laws. Improve the financial regulatory system, bring all financial activities under supervision in accordance with the law, strengthen regulatory responsibilities and accountability systems, and strengthen coordination between central and local supervision. Build a safe and efficient financial infrastructure, unify the registration, custody, settlement and clearing rules and systems of the financial market, establish a hard constraint system for early correction of risks, and build a financial stability guarantee system that effectively prevents and controls systemic risks. Improve the mechanism for financial consumer protection and combating illegal financial activities, and build a "firewall" between industrial capital and financial capital. Promote high-level financial opening, steadily and prudently advance the internationalization of the RMB, and develop the RMB offshore market. Steadily advance the research and development and application of the digital RMB. Accelerate the construction of Shanghai International Financial Center.

Improve the management model of pre-entry national treatment plus negative list, and support qualified foreign institutions to participate in financial business pilots. Steadily and prudently expand financial market connectivity and optimize the qualified foreign investor system. Promote the construction of an independent and controllable cross-border payment system and strengthen the financial security mechanism under open conditions. Establish a unified full-caliber foreign debt supervision system. Actively participate in international financial governance.

According to the interviews with reporters, among a series of proposals,Five major proposals have received high attention: improving the positioning and governance of financial institutions, and improving the incentive and constraint mechanism for serving the real economy; bringing all financial activities under supervision in accordance with the law, and strengthening regulatory responsibilities and accountability systems; establishing a hard constraint system for early correction of risks, and building a financial stability guarantee system that effectively prevents and controls systemic risks; improving the mechanism for protecting financial consumers and combating illegal financial activities, and building a "firewall" between industrial capital and financial capital; and supporting qualified foreign institutions to participate in financial business pilots.

Hot topics such as salary, new quality productivity, and sustainable development are all involved

Since the new quality of productivity was proposed, the macro-institutional system, financial field and capital market have all been providing support. In this "Decision", the new quality of productivity has been largely reflected and has also provided clear guidance for subsequent work.

The Decision shows that it is necessary to improve the system and mechanism for developing new quality productivity in accordance with local conditions, promote revolutionary technological breakthroughs, innovative allocation of production factors, and deep transformation and upgrading of industries, promote the optimal combination and renewal of workers, labor materials, and labor objects, give birth to new industries, new models, and new momentum, and develop productivity characterized by high technology, high efficiency, and high quality.

Strengthen innovation in key common technologies, cutting-edge leading technologies, modern engineering technologies, and disruptive technologies, strengthen the supply of systems in new fields and new tracks, establish a mechanism for future industry investment growth, improve the development policies and governance systems for strategic industries such as new generation information technology, artificial intelligence, aerospace, new energy, new materials, high-end equipment, biomedicine, and quantum technology, and guide the healthy and orderly development of emerging industries. Lead the optimization and upgrading of traditional industries with the improvement of national standards, and support enterprises to transform and upgrade traditional industries with digital intelligence technology and green technology. Strengthen institutional constraints such as environmental protection and safety.

The Decision also states that relevant rules and policies should be improved to accelerate the formation of production relations that are more compatible with new productivity, promote the gathering of various advanced production factors to develop new productivity, and significantly improve total factor productivity. Angel investment, venture capital, and private equity investment should be encouraged and regulated, the role of government investment funds should be better utilized, and patient capital should be developed.

The Decision also mentions the remuneration of financial institutions, which has attracted much attention in the market recently. The Decision shows that it is necessary to standardize the income distribution order, standardize the wealth accumulation mechanism, increase the property income of urban and rural residents through multiple channels, and form a system that effectively increases the income of low-income groups, steadily expands the size of the middle-income group, and reasonably regulates excessive income.

Deepen the reform of the wage determination mechanism of state-owned enterprises, reasonably determine and strictly regulate the salaries, allowances and subsidies of leaders at all levels of state-owned enterprises.

In terms of sustainable development, the Decision also contains many details. The Decision shows that fiscal, tax, financial, investment, price policies and standards systems that support green and low-carbon development will be implemented, green and low-carbon industries will be developed, green consumption incentive mechanisms will be improved, and the construction of a green, low-carbon, circular development economic system will be promoted.

The China Securities Regulatory Commission has recently clarified five major implementation tasks

The Decision shows that the overall goal of further deepening reform is to continue to improve and develop the socialist system with Chinese characteristics and promote the modernization of the national governance system and governance capacity. By 2035, a high-level socialist market economic system will be fully established, the socialist system with Chinese characteristics will be further improved, the modernization of the national governance system and governance capacity will be basically achieved, and socialist modernization will be basically achieved, laying a solid foundation for building a socialist modern power in an all-round way by the middle of this century.

The "Decision" mentions focusing on building a high-level socialist market economic system, giving full play to the decisive role of the market in resource allocation, better playing the role of the government, adhering to and improving the basic socialist economic system, promoting high-level scientific and technological self-reliance, promoting high-level opening up to the outside world, building a modern economic system, accelerating the construction of a new development pattern, and promoting high-quality development.

On July 19, Wu Qing, Secretary of the Party Committee and Chairman of the CSRC, chaired a Party Committee (expanded) meeting to clarify the future work direction of the CSRC system. The meeting stated that it is necessary to consciously adhere to and maintain the centralized and unified leadership of the Party Central Committee over the work of the capital market, closely focus on the central task of promoting Chinese-style modernization, firmly grasp the hard truth of high-quality development in the new era, highlight the strengthening of the foundation, strict supervision and strict management, adhere to the use of reform to help stability, promote development, improve services, and strengthen the team, and unswervingly push forward the comprehensive deepening of capital market reform.

First, we must persist in using reform methods to resolve the deep-seated contradictions and problems that hinder the stable and healthy development of the capital market and enhance the inherent stability of the capital market.

The second is to further enhance the capital market’s inclusiveness and adaptability to scientific and technological innovation, cultivate and expand patient capital, do a good job in the “five major articles” of finance, and guide more resources and factors to gather towards new quality productivity.

The third is to improve the institutional mechanisms of strong and strict supervision, strengthen full-chain supervision of listed companies, vigorously strengthen investor protection, and strengthen regulatory accountability.

Fourth, coordinate development and security, implement requirements for early identification, early warning, early exposure, and early disposal of risks, improve risk prevention and mitigation mechanisms in key areas such as bond defaults, private placements, and trading venues, and maintain the safe operation of capital market infrastructure.

Fifth, we must turn the knife inward and carry out self-revolution, do a solid job in rectifying the central inspection, deepen the study and education of party discipline, unswervingly rectify the work style, enforce discipline and fight corruption, and build an iron team of supervision.