Discover and read the best of Twitter Threads about #CSRC

The #capital market is critical to technological #innovation, noted Xiao Gang, former #CSRC Chairman, stressing the capital market’s role in bridging industrial development and technological advances...1/8

Underpinning industrial developments and competitiveness are technological innovations; all innovations are built upon #R&D which must be supported by adequate capital. Innovations based on original technologies need huge #investment and a long time to materialize...2/8

People would not put their #savings or bank #loans in these risky projects..Only investors who are willing to take the risks in exchange for maximum potential returns would make investment...3/8

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4 things about #China's #financial supply-side structural reform:
1. It focuses on the supply side, not the demand side of #credit expansion. Stressing the role of finance in serving real #economies doesn't mean flooding the economy with #liquidity.

2. It stresses the service role of #finance and calls for improving #service quality & efficiency, not extensive #management.

3. It calls for “targeted” #supply which can match #demand precisely and effectively,
rather than ineffective and inefficient supply growth.

4. It focuses on institutional & mechanism reform, not simply policy implementation and regulation. #Monetary & credit & macro policies are constantly adjusted in accordance with #economic and #financial situation.

By Xiao Gang, former #CSRC Chairman: cf40.org.cn/uploads/newsle…

Past experience has spoken against the effectiveness of setting rigid targets and eligibility requirements to enhance commercial sustainability of #financial institutions. Assessing the effectiveness of #banks’ support to private #firms only by quantitative measures isn't valid.

But this doesn't mean evaluation isn't needed, instead we should evaluate from multi dimensions, while following #market rules, taking into account the quantity, #efficiency and #quality of #loans, and enhancing the precision of support and banks’ #commercial #sustainability.

It is better not to rely on rigid measures, otherwise a variety of old problems would repeatedly occur. By Xiao Gang, former #CSRC Chairman and CF40 non-resident senior fellow.

Different types of private #firms have different appeals and demands, so different approaches are adopted to support them now. Local #governments, out of social #stability considerations, mainly channel their support towards large firms that are major #employment contributors.

#State-owned #asset platforms are more concerned about #profitability for fear of loss or reduction of state assets. #Securities companies which have a lot of #equity #pledge worry more about how to address #risks related to the pledges.

#Banks are more willing to support private #firms which not only run well but also have adequate #capital. These #entities all make rational choices, but in the long run, there are still rules and standards to be set. By Xiao Gang, former #CSRC Chairman.

According to Xiao Gang, former #CSRC Chairman and CF40 non-resident senior fellow, #China should develop a #market-oriented, diversified and law-based #financial #service system, which requires efforts in nine aspects:
1. improve standards and rules to support private #firms;

2. respect #market rules and enhance #commercial #sustainability of #financial institutions;
3. #reform the existing financial institutions system;
4. accelerate the transformation of #commercial #banks;
5. build a multi-level #capital #market;

6. develop #Fintech and apply #BigData big to support inclusive #finance;
7. establish and improve the #chattel financing system;
8. accelerate the development of #asset #securitization;
9. strengthen rule of #law and enhance the stability and continuity of #policies.