"Improve market connectivity mechanisms such as GDR and CDR issuance, promote the implementation of the reform of the overseas listing system for enterprises, and support all types of enterprises to go public overseas in accordance with laws and regulations." Recently, Fang Xinghai, Vice Chairman of the China Securities Regulatory Commission (CSRC), made the remarks at the sub-forum "High-Quality Opening-Up of China's Capital Markets" of the 5th Hongqiao International Economic Forum. Fang Xinghai stated that in recent years, high-level institutional opening-up measures for the capital market have been rolled out gradually, effectively promoting the high-quality development of the capital market. Regarding foreign institutions operating in China, Fang Xinghai pointed out that so far, 12 foreign-controlled or wholly foreign-owned securities, fund and futures companies including JPMorgan Chase, Goldman Sachs, Nomura and UBS have been successively approved. Three foreign banks including Standard Chartered have had their Chinese subsidiaries obtain fund custody qualifications. Foreign private equity securities firms such as Bridgewater and BlackRock have successively established 38 wholly-owned subsidiaries. "Foreign-funded fund management institutions have brought their global asset management models, investment philosophies, investment strategies and risk control experience to China, playing an important role in enriching the landscape of China's fund industry." Regarding expanding cross-border investment and financing channels, Fang Xinghai noted that as of the end of September this year, the total net inflow of funds through the Shanghai-Shenzhen-Hong Kong Stock Connect has reached 1.68 trillion yuan. In addition, 5 A-share listed companies have issued global depository receipts (GDRs) in the UK and 7 in Switzerland, raising a total of more than 8.5 billion US dollars. Currently, another 3 A-share listed companies are in the process of issuing GDRs, and 16 companies have announced their plans to issue GDRs. Issuing GDRs overseas will effectively promote the international operation of A-share listed companies. Regarding the opening-up of internationalized products, according to Fang Xinghai, 11 China-Japan ETF Connect products and 6 Mainland-Hong Kong ETF Connect products have been launched, and the China-Singapore ETF Connect product is about to be launched. For the 7 futures varieties open to overseas investors, including crude oil, PTA and iron ore, overseas investors account for 10-20% of the total trading and positions of each variety, effectively improving the market operation quality of these varieties. China supports high-quality overseas enterprises to issue Panda Bonds on the exchange bond market, with a total of 78 Panda Bonds issued and a total issuance scale of 118.2 billion yuan. Regarding the next step of work, Fang Xinghai introduced from three aspects how the CSRC will unswervingly promote the high-level opening-up of the capital market. When it comes to attracting more domestic and overseas medium- and long-term funds through the high-quality development of the capital market, Fang Xinghai said that China will unswervingly introduce more various types of overseas institutional investors to promote the development of the institutional investor team in China's capital market. "Structurally, since the beginning of this year, allocation-oriented and long-term funds have maintained net inflows. This shows that foreign investors are optimistic about the long-term investment value of A-shares, and also reflects their confidence in the long-term positive trend of China's economy." According to Fang Xinghai, in the first 10 months of this year, 289 companies have carried out IPOs on the Shanghai and Shenzhen stock markets. A number of technology-leading and market-recognized scientific and technological innovation enterprises have listed on the capital market, which also provides richer and more diverse investment opportunities for domestic and overseas investors. When it comes to welcoming high-quality overseas capital market institutions to invest and operate in China, Fang Xinghai pointed out that in terms of scale, China has become the world's second-largest stock and bond market, with a solid foundation for long-term and stable development, and its attractiveness to international investment banks, asset management companies, futures companies and other institutions is increasing. "We will earnestly implement the spirit of the 20th National Congress of the Communist Party of China, further improve the institutional framework for the opening-up of the capital market, accelerate the implementation of various opening-up measures, and attract and gather more excellent international institutions and talents to participate in China's capital market." When it comes to adhering to promoting high-level institutional opening-up of the capital market, Fang Xinghai believes that promoting the construction of a market-oriented, law-based and internationalized business environment is the key to institutional opening-up. "We will continuously improve relevant institutional arrangements, further facilitate cross-border investment by domestic and overseas investors, and better support the development of enterprises' cross-border financing. We will improve market connectivity mechanisms such as GDR and CDR issuance, promote the implementation of the reform of the overseas listing system for enterprises, and support all types of enterprises to go public overseas in accordance with laws and regulations." Fang Xinghai further added. He also said that China will strengthen practical cooperation between the Mainland and Hong Kong capital markets, expand the scope of stocks eligible for the Shanghai-Shenzhen-Hong Kong Stock Connect by including more A-share listed companies, support Hong Kong in launching RMB stock trading counters, support and coordinate with the Hong Kong side to launch treasury bond futures in Hong Kong, so as to achieve complementary advantages and coordinated development between the two places. © 2021 Meishun (Hong Kong) Management Consulting Co., Ltd. and Meishun (Hangzhou) Management Consulting Co., Ltd. All rights reserved. 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