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Interview With Zhang Yundong, Former Director Of Shenzhen Securities Regulatory Bureau: Balancing Financial Quality And Efficiency

2020/9/26 9:00:00 85

Interview With 30 People In China'S Capital Market In The Past 30 Years

On December 1, 1990, the first trading record of Shenzhen Stock Exchange was produced, and China's capital market set sail from then on.

Thirty years, a flick of the finger.

In the industry, there are many difficult moments in institutional change, and there are also numerous scenes that witnesses will remember.

This issue of 21st century economic report interviewed Zhang Yundong, a veteran of China's stock reform and capital market creation. He drafted the first legal document of China's capital market, the Interim Provisions of Shenzhen Stock Company Limited. As a member of the legal expert group, he participated in the discussion and negotiation with Hong Kong Legal experts on the creation of legal documents for H-share market.

From 2000 to 2012, Zhang Yundong was the director of Shenzhen Securities Regulatory Bureau. During this period, the Shenzhen Securities Regulatory Bureau has made remarkable achievements. The typical securities regulatory samples of Zhang Yundong's term of office include punishing the case of occupying huge funds of Sanjiu pharmaceutical, investigating and dealing with the stock price manipulation case of Zhongke venture, rectifying the commercial fraud of membership system of investment consulting companies, and cracking down on the "rat warehouse" of fund managers.

According to the reporter of 21st century economic report, Zhang Yundong officially retired from the Securities Regulatory Commission System on May 30, 2012. On behalf of the Party committee, the leaders of the CSRC spoke highly of and fully affirmed his work. Zhang Yundong, who has retired for eight years, is still paying close attention to the allocation of resources in China's capital market and national financial security.

"What I am focusing on now is the direction and efficiency of the allocation of market resources. In addition, there is also very important financial security. I have never hoped that my opinions can be turned into policies, but I dare not forget to worry about the country. " Zhang Yundong said.

Looking back on the memory of the stock reform: "pretentious" is very important to the development of enterprises

In 1988, Zhang Yundong, who had studied economics for four years in the Party School of Shaanxi provincial Party committee, decided to go south to Shenzhen, the forefront of China's reform and opening up, and became a subordinate of Xu Jingan, the former deputy director of the Institute of structural reform of the State Commission for structural reform, who had made important contributions to China's price double track system, and joined the Municipal Administration of Shenzhen under his leadership The government's Economic Restructuring Commission (hereinafter referred to as "the Commission for restructuring") has become a full-time reform worker.

According to Zhang Yundong, at that time, the Commission had two main tasks: one was the reform of the shareholding system, the other was the reform of social insurance and medical insurance. Zhang Yundong has deeply participated in the joint-stock reform of state-owned enterprises in Shenzhen. With the advancement of the reform, joint-stock reform and capital market financing constitute his main business.

21st century: you are one of the promoters of the stock system reform of the early state-owned enterprises in Shenzhen. Can you tell us why Vanke and other old five stocks became the first enterprises in the joint-stock reform?

Zhang Yundong: to talk about the early shareholding system reform in Shenzhen, I think Vanke is really of typical significance.

In the early five stocks, Vanke is the only one left today. Why did you choose Vanke at that time? At that time, there were not many good enterprises with enough scale in Shenzhen, so we had little choice. Vanke belongs to the conscious and initiative door-to-door.

At that time, Vanke was a three-tier company under the development company of Shenzhen Special Economic Zone, called modern enterprise. It was a diversified enterprise starting from the trade of medical equipment. In terms of operation, it was successful in the early stage of starting a business, but in fact there was nothing to be said about it. However, Vanke had a sense of self-consciousness. He felt that he needed to take stock system reform and the securities market to make himself to a higher level. He also grasped the opportunity of the era of joint-stock reform at that time.

What's the most amazing thing about Vanke? I think it's his self-regulation and strict requirements. When we were discussing the joint-stock reform plan of Vanke, Wang Shi said a word at that time, which impressed me deeply. Wang Shi said, "our joint-stock reform of Vanke should comply with the requirements of listed company standards."

At that time, we could only say that there was no public listing standard for a company to be listed on the stock exchange. Up to now, I feel that this advanced awareness of strict self-regulation is very important, which not only makes Vanke a model of standardized operation in China's capital market, but also promotes the success of its own industry.

Although Vanke is now an enterprise with real estate as its main business, Vanke did not have a main business before the shareholding system reform. After the public offering, it slowly found its own industrial direction - real estate. However, before Vanke, there were many real estate enterprises in Shenzhen, and some of them were quite large at that time. For example, Shenzhen property and Shenzhen SAR real estate companies were bigger than Vanke. However, those enterprises can no longer be compared with Vanke today. This is the magic power of self-regulation.

We still have many listed companies today, which are much worse than Vanke's self-regulation requirements more than 30 years ago. Therefore, Vanke is worthy of good publicity. We should let our entrepreneurs understand how important it is for the development of enterprises to make our entrepreneurs understand self-regulation, lofty ambition, arrogance and strict requirements on their own high standards.

Preparing for the establishment of capital market: the problem of B shares is my regret

21st century: what are the main considerations in the process of drafting the first legal effect document in China's capital market, the Interim Provisions of Shenzhen joint stock company limited?

Zhang Yundong: at that time, the State Council required Shenzhen and Shanghai to continue to carry out the pilot joint-stock system of offering shares to the public, and on the other hand, required us to formulate management measures. When we drafted, there were relatively few foreign and regional company laws that we could learn from. Here, the standard company law of the United States and western financial management were relatively systematic Hong Kong Companies Ordinance, etc.

What impresses me most is the book of western financial management. As a joint-stock company, according to the western financial management structure, the relationship between its internal financial entities is very important for the future development of legal norms. At that time, I happened to see another copy of the book in the Western Industrial Management Office of Anjie.

It should be said that this copy is very helpful to my drafting work. In addition, at that time, we also had some practice of company reform. We also knew what the main value selection target of our shareholding system reform was, and we had the correct problem orientation. Therefore, the management measures we drafted are not completely copied, but are based on our own experience of reform and practice.

"21st century": the final foreign share plan has determined the AB share scheme provided by Shanghai, rather than the QFII scheme formulated by Shenzhen. At present, the B-share market has been gradually marginalized. How do you feel about this?

Zhang Yundong: Although the market was still in its infancy, we also considered the issue of openness and internationalization at that time. At that time, our country's reform and opening up was to attract foreign funds on a large scale, but at that time, the form of attracting foreign funds was direct investment, so how to attract foreign funds through our securities market? We hope that this platform can not only finance in the domestic market, but also in the overseas market, but financing in the overseas market involves a big problem - financial security.

For example, the year before I came to Shenzhen, there was a very serious stock market crash in the United States. So how to make foreign funds through our market not only can provide funds for enterprise development, but also let it not impact the market. At that time, I designed a unified market for internal and external investors, and designed a safety valve system for overseas qualified investors. At that time, Shanghai was also drafting management measures and designing the AB share scheme. We think that ab shares have increased the management cost. In addition, the market itself is not big, and if we cut out a small market for it, the financing efficiency will be a problem.

Later, for various reasons, we adopted the same AB share scheme as Shanghai. What kind of plan should be adopted to internationalize the securities market is only a choice of path, and there is no right or wrong. Since we are going to stick to the b-tail stock market soon, we hope that we can solve some problems in the future.

Financial opening: how to set up supporting policies?

21st century: under the background of accelerating financial opening, how should China's stock market balance security and openness?

Zhang Yundong: there is no doubt that continuing to open up to the outside world is an important strategic decision of the Central Committee, which should be carried out conscientiously.

There is no doubt that the entry of foreign capital into China's capital market is favorable in the short term, and it is of positive significance to promote and activate a shares. However, we should pay attention to this issue from the perspective of national strategy and national security.

I think we can take a look at the performance of these foreign capital entering China's capital market in the home market. In the 1980s, there was a very remarkable chairman of the Federal Reserve, Paul Volcker, who had a profound understanding of the current financial market in the United States. He said that since the 1980s, the biggest and most unfortunate change in the U.S. financial market is that the entire industrial model has changed. Before the 1980s, the mode of providing financial services for the financial industry in the United States was the mode of financial industry undertaking. But it has become a model of financial transactions. Financial institutions in the United States are not providing financing intermediary services for real industries and enterprises, but focusing on transactions. It innovates in the trading market, but it is actually "self serving.". The cyclical financial crisis that we often see, as well as the more serious industrial shell in the United States, are the result of economic financialization and financial transaction. Therefore, we should be vigilant and promote the advantages and suppress the disadvantages.

I think that the main way to attract foreign investment is to attract direct investment. The biggest advantage of direct investment is to support the development of China's local real industries and enterprises. Financial opening up is a decision made by the central government, and we must implement it well. However, it does not mean that once it has been opened, it will be in a rush. We must be responsible to the central government and the state, manage and control the opening up of finance, and let foreign capital serve us.

How to manage it?

In my opinion, the urgent task is to establish a real-time monitoring system, a professional command system and a professional team, so that financial openness can be observed, controlled and prevented. It can be observed that we can see under what conditions the foreign capital and flow in and out every day are more in and out; controllable is that the flow can be controlled, we should prevent the kind of big import and big output, which will impact our market; the risk can be prevented, that is, when the market cycle is reversed, we can effectively deal with the huge impact and financial sniping.

We should invite experts with practical experience, such as Joseph Yam, the former president of the Hong Kong Monetary Authority, as our consultant to share his practical experience in fighting against financial giants. Not only to build a real-time monitoring system, but also to train our professional team, to carry out combat oriented wargame rehearsal. Only by making these preparations, can we better implement the central financial opening policy and benefit our capital market construction.

Market supervision: registration system is a balance between quality and efficiency

21st century: how to meet the regulatory demands of the market under the registration system? What is the difference between the regulatory strategy and the approval system?

Zhang Yundong: I think the registration system is an adjustment of the financing policy, which is a very correct step.

There is a big change in the registration system. In fact, today's registration system does not mean non examination, but a balance between quality and efficiency. In this balance, I think the most important thing is the quality of listed enterprises. That is to say, through the registration system, we can bring the real excellent real industries and enterprises with sustainable profit prospects to the market and provide them with financing intermediary services.

Made by Gan Jun

Now that the securities law has been promulgated and the registration system has been implemented, how and where should our market develop? This year, I have been constantly considering this issue. Although our capital market has made great achievements after 30 years of development, there are still some unsatisfactory aspects, which have been criticized and criticized by all kinds of people in some aspects. What is the problem?

I think there are two main problems, one is false information, the other is market obstruction. Our market is still full of false information, which undoubtedly affects market fairness, market order and market efficiency. False information will seriously harm the interests of the majority of small and medium-sized investors. Therefore, great efforts must be made to deal with false information.

How to deal with false information and make the market transparent? In my opinion, there are only two aspects: one is how to disclose information; the other is how to ensure the quality of information, that is, the information disclosed can be accurate, timely and complete. I think after 30 years of development, we have done a good job in information disclosure, which is also very detailed and complete.

So what's the main problem today? The main problem for small and medium-sized investors to understand is how to improve the quality of information.

We should strengthen work in two aspects. First, it is necessary to strengthen on-site inspection and go deep into the supervision objects; in addition, while carrying out direct supervision on listed companies, it is necessary to adjust part of the supervision force from direct supervision to indirect supervision, that is to say, to directly supervise the audit work of certified public accountants, because the certified public accountants are the gatekeepers of the capital market, and they are responsible for the authenticity of information.

We should strengthen the supervision of certified public accountants. For example, we should take the annual report audit season as the busy season of supervision, and transfer a considerable part of the supervision force to follow up the audit activities of Accountants in an all-round and all-round way. Through the direct supervision of accountants and the indirect supervision of our listed companies, the efficiency of supervision can be improved.

What's more, it is necessary to crack down on false information severely or mercilessly. To what extent, the counterfeiters must be beaten to the point where they will lose their wealth and lose their courage. However, I think the securities law should be greatly improved this time.

21st century: how do you understand that the incomplete delisting system is the current market obstruction?

Zhang Yundong: obstruction means insufficient delisting. I think it's a big problem. We must step up delisting and attract excellent ones. I will provide him with financing services. If a company with poor performance is of poor quality, I will ask him to leave.

Taking the world as an example, from 2007 to October 2018, the total number of delisting companies in the world reached 21280, exceeding the cumulative value of 16299 IPOs in the same period, and the delisting scale was larger than the IPO scale. Among them, 2959 were delisted on the London Stock Exchange, with a delisting rate of 9.5%; 1823 were delisted on the New York Stock Exchange, with a delisting rate of 6.6%. However, from 2007 to 2018, there were only 58 delisting companies in Shanghai and Shenzhen stock markets, with the delisting rate of 1.6%, far lower than that of the United States and the United States.

We have always followed suit and regard the US capital market as a standard. Including our margin trading, derivatives, high-frequency trading. But when it comes to delisting, why don't we talk about American samples? If the delisting rate is so low, there is no doubt that there will be a flood of restructuring of poor performing companies. They will look for dark horses everywhere and gamble on how black chickens will become golden phoenix. As a result, these poor performing companies will occupy a large number of resources in the capital market.

The total capacity of market resources is limited, and there is a relationship between supply and demand. The allocation of resources will be distorted and the allocation of resources in the cultural market will be distorted. Therefore, we must strictly limit the restructuring of poor performing companies and allow a large number of inferior companies to withdraw from the market so that the market can be healthy. If the problem of delisting can not be solved and our market obstruction can not be solved, this market will not be a place where the fittest will survive and the allocation of resources will be optimized, and it will be difficult to bear the high expectations of the state on our capital market.

 

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