Guo Shiliang: The Logic Behind The Re Approval Of China'S Stock Market

The Financial Street forum was highly valued by all sectors of society in 2016.

During the period, as a senior research fellow of the State Council Development Research Center and Mr. Wu Jinglian, who has considerable social influence, his speech at the forum attracted the attention of all parties in the market.

Among them, his comments on China's stock market have aroused our thoughts.

As a matter of fact, for Mr. Wu Jinglian, you must be no stranger to him.

At the same time, there are also many controversial points in his position on China's stock market over the years.

From relevant information, he quoted the view of Gao Xiqing, the former vice chairman of the securities and Futures Commission, and said that there was a great defect in the regulation system of China's stock market, that is, instead of putting the regulation on mandatory information disclosure system, instead of putting substantial examination and approval into practice, the whole stock market became a rent-seeking place.

At the same time, he also said that until now, this problem has not been solved, because the highly asymmetric information makes some acts of violation and harm the interests of investors very rampant.

In addition, he stressed that the reform of stock market regulation needs to be shifted from pre regulation to post supervision, and from regulation to regulatory compliance.

In 2001, Mr. Wu Jinglian once said that China's stock market was very much like a casino, which was later summed up by the market as "casino theory".

However, in 2014, in a public event, Mr. Wu Jinglian made a supplement to the "casino theory" and said that China's stock market is not only a casino but also a casino without rules, and it belongs to a casino where people can see others' cards.

It should be noted that in late April of last year, just as China's stock market went on a crazy rise, Mr. Wu Jinglian threw out the idea that "when people were busy in the countryside, when everyone was busy doing nothing but gambling when everyone was free when they were busy farming," the time when the real economy was weak and the stock market soared, the bubble was emphasized sooner or later.

Subsequently, although China's stock market is still refreshing the new high level, but the stock market is not very good, and in the middle of 6 of that year, the bubble burst.

It can be seen that some of Mr. Wu Jinglian's views really hit the market.

At this point, Mr. Wu Jinglian's comments on the stock market still deserve our consideration and careful consideration.

However, it is worth mentioning that compared with the views thrown by Mr. Wu Jinglian, Gao Xiqing, a former vice chairman of the securities and Futures Commission, is also worth pondering over the stock market.

During the previous period, when Mr. Gao Xiqing received an exclusive interview with the media, he said, "it can not be said that China's retail investors are not mature, but the stock market under the current management mode is like retail investors".

Among them, the stock market supervision system has a huge defect on the route as an example. As Mr. Gao Xi Qing and Mr. Wu Jinglian said, it does not focus on mandatory information disclosure system, but on substantive examination and approval, which makes the entire stock market a rent-seeking arena.

However, since the A-share market has entered the approval mode, for the general starting enterprises, it is often necessary to go through a complicated and lengthy audit process, including acceptance, pre disclosure, feedback meeting, meeting, pre disclosure update, first trial meeting, trial meeting, closure, post event and final approval.

However, in the above links, the trial committee is often the last and the most important hurdle before getting the approval.

At this point, the commission can observe strict duties, which directly affects the future issuance of enterprises.

The overall quality of the post.

Unfortunately, the power of the Commission has been almost deified under the background of many years of approval system.

At the same time, in the past, some members of the issuance examination committee came from accounting firms, law firms and other intermediary organizations. When the power of the issuance examination committee exercised power, it was difficult to avoid such interests such as intermediaries, which aggravated the meaning of market power rent-seeking.

Therefore, in view of this situation, in order to fundamentally change the previous situation of the "issuance of power" by the Commission, there may still be a need for further market-oriented reform, and with the help of the securities law, we will pave the way for market reform.

At the same time, we need to strengthen the supervision afterwards and enhance the obligation of conscientious duty of the intermediary organizations, so as to break the phenomenon of rent seeking in the stock market in a real sense.

However, at this stage,

There is still a long way to go to improve the market supervision.

As for intermediaries, there are only a few of them to fulfill their due diligence obligations. However, under the background of low market irregularities, they have intensified the power of rent-seeking in the stock market.

As a result, this undoubtedly brings some resistance to the market-oriented reform of the A share market.

Moreover, taking the highly asymmetric information of the market as an example, in fact, information asymmetry is not a pient problem, but a long-term loophole problem.

However, in the actual situation, for large capital institutions and small and medium-sized retail investors, but often because of information, cost, paction system and other factors of asymmetry, but exacerbated the contradiction between the two.

Among them, insider trading is frequently staged, which is a true portrayal of asymmetric information.

At the same time, because of the serious asymmetry of market information, the price performance of some stocks is

Volatility tends to be irregular, and investors who are rapacious during the period can easily become the successor of the stock price boom.

When a large number of retail investors take the initiative, they directly create some arbitrage opportunities for large funds and institutions with cost, capital and information advantages.

So far, this phenomenon has undoubtedly exacerbated the phenomenon that "the richer the richer, the poorer the poorer."

In addition, under the current management mode, the phenomenon of institutional frying is like retail investors. For example, although the A share market is still dominated by retail investors and the proportion of institutional investors is still relatively low at the present stage, but because of the low cost of market irregularities and the lack of strict supervision, it indirectly opens up a green light for some large capital organizations to make profits through loopholes in the system.

Obviously, under the background of high volatility of stock market, large funds and institutions with strong information, capital, cost and trading system tend to be reluctant to invest in medium and long term value, but they are more interested in short-term frequent pactions.

At the same time, they can also make repeated arbitrage by means of trading tools, which is also impossible for small and medium-sized retail investors who can only rely on one-way profits to achieve profits.

Today, although China's stock market has grown rapidly and become a stock market with a certain global influence, but in view of the long-standing problems in China's stock market, if it is not found and solved in time, it will directly affect the healthy development of the stock market in the future and the vital interests of small and medium investors.

Now, Mr. Wu Jinglian has directly pointed out the problem of China's stock market, and the problems he raised are worth our deep consideration.