Exclusive Interview With Zhang Shenfeng, Member And Vice President Of CCPIT Party Committee: A Registered Bull Market With Registration Reform As The Driving Force Has Been Presented.

"We can positively estimate that under the situation that many bad factors at home and abroad have basically bottomed out, the market after several years of hard accumulation is gaining momentum. A registered bull market characterized by registered system reform to promote the full development of the real economy and the capital market is coming slowly."

30th anniversary of China's capital market, in the eyes of some people, is "ten years of zero growth", "A shares bear the whole world". In the eyes of some people, it is a hard and brilliant advance in "reform and innovation and development" and "prevention and mitigation of risks".

Looking back at the 30 years of the birth of China's capital market, in twenty-first Century, the economic report gave exclusive interview to Zhang Shenfeng, member and vice president of CCPIT Party committee.

Zhang Shenfeng took part in the work in 1982. Over the past 38 years, he has worked for 20 years in the securities regulatory business. He has served as a local regulatory office, a local dispatched body of the securities and Futures Commission, a general inspection team, a checking Bureau and a China Financial Futures Exchange. Before being transferred to China Council for the promotion of trade in 2018, he served as Party committee member and assistant chairman of the China Securities Regulatory Commission.

30 year new window: registration system is "nose nose".

A year ago, the creation board was officially opened. At present, the registration system reform of gem is in full swing.

Zhang Shenfeng believes that the 30 years of the capital market is the 30 year of China's economic transformation and an important historical witness of China's reform and opening up. Under the important historical window, "registration reform" is the core variable and the most important keyword. Only by implementing the registration system reform can the market achieve the best state of "complete financing function".

Twenty-first Century: does the speed of registration reform exceed the expectations of the society?

Zhang Shenfeng: in promoting the rhythm far exceeded the social expectations. The registration system is what we are striving for. We have grasped the direction of registration reform. We have grasped the ultimate goal of promoting the development of the market and the reform and development of the capital market. We have grasped the key to pushing China's economic development to a new level with advanced direct financing.

Twenty-first Century: why should we promote the registration system and how to look at the reform of the IPO trial system?

Zhang Shenfeng: registration system is an advanced stock issuing and listing system, which has been proved by the long-term practice of the market economy. Generally speaking, there are two ways of social financing, one is indirect financing represented by traditional banks, and the other is direct financing represented by capital market. Who cares most about this fund? Who is most responsible for the operation of this fund? It must be a direct shareholder, not an indirect financing provider such as banks. Everyone is concerned about the growth of personal wealth, and the people of the whole country can converge into a huge force to promote the great development of capital market and real economy.

The A share market from the earliest administrative allocation system, from top to bottom to the provinces and municipalities to allocate the quota, the number of distribution; after that, by the securities company as a channel, the implementation of the securities brokers' judgment and screening with the SFC's review and one vote veto system combined with the approval system; and then the transition to the current registration system, is a huge historical progress.

Twenty-first Century: registration system reform has been very cautious in the early stage. Why is it so slow? What is the difficulty of registration system in the A share market?

Zhang Shenfeng: this can not be said that slow, China's capital market is a typical "emerging and transitional market".

Registration system originates from the market dominated by private ownership, and there is no question of public power approval. It is spontaneously formed by the market. Our country implements the basic economic system with the public ownership as the main body and the multi ownership economy developing together. The registration system from the government approval to the market choice is bound to have a long-term transition process.

The maturity of the market is not a transfer of people's will. It is a slow and dynamic gradual process, especially a sound legal system as a support. Take the law of securities law as an example, we need to solve some problems in one period, and there will never be a fundamental law for once and for all. Advancing with the times is also the basic principle of legislation.

In this process, the forces of the market are also playing games. For example, the implementation of the delisting system is not satisfactory. Local governments should also protect local productive forces, especially financial resources. The function of market failure and innovation and survival of the fittest will not function properly. The progress of any system engineering ultimately depends on the solution of the short board.

But you will find that whether the small and medium sized board, the gem or the Chuang Chuang board have been launched, the policy has always been moving towards the direction of promoting the development of advanced productive forces and moving towards enhancing the inclusiveness and competitiveness of the capital market system.

Twenty-first Century: what is the importance of enhancing the inclusiveness and competitiveness of the capital market?

Zhang Shenfeng: over the past 20 years, many good companies have been unable to go abroad on the A stock market under the old legal framework, for example, the number of former shareholders exceeds 200, overseas registration, share rights and strategic losses.

It is the best state of the market participants to keep good companies at home, let good companies go public as soon as possible, and enable them to get faster development and allow investors to get more returns.

At present, the registration system reform of gem is in full swing. Visual China

Financial risks should be prevented and risks should be resolved.

The development of the capital market in the past 30 years is behind the exponential beating. It is a difficult and complicated history of risk management. Many of these moments have disappeared from people's perspective.

As a witness to many historical moments, Zhang Shenfeng believes that once financial risks are formed, it is difficult to resolve them. Therefore, financial risks should be prevented and risks should be resolved.

Twenty-first Century: when you worked in the Shandong provincial government, what opportunities did you enter the field of securities regulation?

Zhang Shenfeng: I entered the field of securities supervision from the participation of the Shandong provincial government in resolving securities companies and disposing of local financial risks.

In 1995, Shandong securities (Tiantong securities, Qilu Securities and securities of China and Thailand) had a huge loss of 526 million yuan due to illegal participation in high-risk businesses. The Shandong provincial government organized local enterprises in the province to pay for debt repayment. Since then, I have been more exposed to the risks and disposal problems of local financial institutions.

In 1997, against the background of the Asian financial crisis, the State Council decided to clean up the local OTC stock market. Shandong province is the largest province in the local stock exchange, and I am involved in more specific liquidation. Under the strong leadership of the provincial government and the strong support of the SFC, we will adopt a variety of ways, mainly mergers and acquisitions, which will clear and close the 150 warrants, 1 million 80 thousand shareholders, the Shandong warrant market, the Zibo quotation system and the Qingdao Stock Exchange Center, which account for 75% of the national OTC volume. Of course, it also costs a lot.

In 2001, after the Qingdao special operations office, in view of the huge losses caused by the illegal participation of brokerage companies in Qingdao Wantong in the stock market, the CITIC Securities was promoted to reorganize Qingdao Wantong, and the "three no" measures of "one penny's margin is not moved, one penny does not receive money, and one penny does not operate" is put forward. Fan, a good brokerage firm.

Twenty-first Century: I heard that when you cleaned up the risk of securities and futures in Shandong, you put forward a "sugar coated gourd type" restructuring mode. Can you introduce it?

Zhang Shenfeng: in 2004, I just worked in Shandong securities regulatory bureau, that is, to defuse the risk of Tiantong securities. The company suffered huge losses due to 3 stocks in the market, and it was insolvent. With the support of the SFC and the Shandong provincial government, we will first standardize and consolidate the Qilu Securities, which are controlled by state owned assets in the province, and introduce the capital increase of the provincial capital enterprises. After that, we will acquire the effective assets of Tiantong securities, and the state will invest more than 1 billion yuan to acquire the personal financial claims of the shareholders. This led to the formation of Qilu Securities (the predecessor of the Sino Thai securities listed now).

The regulation of Shandong's three high-risk Futures Company is also adopting this model. First of all, the introduction of stronger shareholder norms to consolidate the futures of Quan Xin, and take this as the parent to acquire the effective assets of Qilu futures and Sanlong futures, which have huge risks, all the two companies have cancelled and successfully resolved the risks. Lu Zheng futures, a restructuring of the three Futures Company, ranks among the top 10 in the country and is listed in Hongkong.

Twenty-first Century: from the beginning of last century's contact with capital market in 90s, what have you been most thrilling about in 20 years of supervision?

Zhang Shenfeng: the most exciting thing is the abnormal fluctuation of stock market in 2015 and the rescue of the stock market. In the first place, the stock market is in danger, and the stock market is in danger. In the late stage, the market is fluctuating sharply, and the market is fluctuating. Once there is a retreat, the off-site financing platform, namely, the automatic closing of the stock market, has helped the stock market spiral down rapidly. Fortunately, the central government made a decisive decision and saved the market quickly.

Two points I have the most profound experience: first, finance is the core of the modern economy. To develop the market economy, we must make great efforts to train and use financial professionals, otherwise the risk of prevention and control is difficult.

Second, financial risks should be avoided and risks should be resolved. Once financial risks are formed, they often fail to recover. It is also a deeper understanding of why general secretary Xi Jinping has taken the precaution and resolution of major risks as the top priority of our "three major battles".

Rule by law is the permanent direction of capital market construction.

The memory of the market in 2007 is only 6124 points high. Further, the State Council promoted the reform of China's Securities Enforcement System this year.

Twenty-first Century: you are the first party secretary and chief captain of the SFC general investigation team. Can you introduce the background and some basic situations of the formation of the Corps?

Zhang Shenfeng: after the promulgation of the "nine countries" in 2004, the market gained steady and standardized development. By 2007, the split share structure reform was basically completed, and the listed companies cleared up and settled. The three years of regulation and rectification of the securities Futures Company were basically closed. The market players increased substantially, the number of shareholders increased exponentially, the scale of transactions expanded rapidly, and the corresponding market risks were gradually expanding and expanding. Illegal crimes are also increasing. How to ensure the healthy development of the securities market and the task of building a team of law enforcement inspectors that are compatible with market development are urgently placed before the regulators. Under the leadership of the CPC Central Committee and the State Council, the Central Committee has made special preparations for the Commission to increase its establishment by 300, and speed up the reform of the law enforcement system for inspection.

There are two specific tasks for reform: first, the establishment of a general inspection team specializing in insider trading, market manipulation and cross regional large cases, which is directly under the supervision of the SFC, and at the same time, a part should be compiled to supplement the inspection power of the relevant securities regulatory bureaus. The CSRC shall conduct unified supervision and command. Two, the separation of the trial and the trial shall be carried out, and a special administrative punishment committee shall be set up to improve the case trial. To check and standardize the degree of punishment, comprehensively enhance the quality and level of law enforcement in the capital market, and increase the protection of investors' rights and interests.

Twenty-first Century: how does the inspection team operate and what has been achieved?

Zhang Shenfeng: the formation and development of the Corps can not be separated from the strong leadership and encouragement and support of the SFC Committee. After the establishment of the 2007, I was appointed the party secretary and chief captain of the inspection team. The SFC attaches great importance to the work of the formation of the Corps. In particular, comrade Fan Fuchun, deputy secretary of the Party committee and vice chairman of the Party committee, personally checks the major issues. The Party committee specially selected the business backbone to select the whole system and face the market and recruit professionals. It can be said that the people in the corps are from all sides and all corners of the country.

How to unite people's hearts and fair law enforcement is a major issue. The Party committee of the Corps first made clear that it is the highest goal to gradually enhance the people's satisfaction with the enforcement of securities inspection, thus establishing the team's guiding principle of unity, fairness, diligence and efficiency. We persisted in establishing and handling cases at the same time, taking the case instead of training, promoting the investigation by the trial, improving the side by side, and promptly seized a series of major cases such as "Wang Jianzhong manipulation" and so on, relying on big data analysis and processing and high technology content.

A bit of hard work, a bit of harvest. Over the past few years, a group of people in the Corps has overcome many difficulties, pushed ahead and fought tenaciously, and investigated one case after another, and won another honorary title. In the 20 years' achievement exhibition of the construction of the capital market, the State Council leaders were pleased to commend: in recent years, the SFC has cracked down on crimes. On 2011, in commemoration of the 90th anniversary founding of the CPC, the Central Organization Department awarded the honorary title of the national advanced grassroots party organization of the inspection team. The Inspection Corps has also been awarded the title of "central state organ civilized unit", "advanced securities and futures supervision system and advanced grassroots party organizations" and so on. Many people have won the "youth 54 Medal" of the central state organs and the "51 day labor awards and medals" and other honors. Hundreds of people have won meritorious service in the collective and individual commendation of the securities and futures regulatory system.

In a large number of advanced models of selfless dedication, Zhou Xiaoming, who has handled dozens of cases and travels for 193 days in a year, also has Zhao Baisong, who has been drinking a cup of tea for second days to send a box of tea, and Xu Weijuan, who has devoted herself to the construction of the Corps. He helped young cadres rent their houses and find their own objects. Body wedding became a famous "sister of the brigade". There are also a long list of advanced characters: Xia Zhiliang, Guo Ruiming, Zheng Xiaoyi, Peng Zhi, Yi Yang, Yan Yan and so on.

In the face of numerous honours, chairman Guo Shuqing (Note: Guo Shuqing, chairman of the SFC and Secretary of the Party committee from October 2011 to March 2013), on the one hand, commended the inspection team as a "Iron Army", which was extremely hard-working, especially capable of fighting, and especially dedicated. Goals. Now, after all these years, these words are still loud and powerful. I think this is the key to keeping the youth of our inspection team forever.

The Shanghai Composite Index underestimated more than 3700 points when it reached its highest level in 2015.

Generally speaking, the society is concerned about the compilation of the Shanghai Composite Index. Zhang Shenfeng thinks that in the stock market with a large majority of retail investors in China, a real index representing risk and a comparative value is of great significance.

"Twenty-first Century": stock index futures are much discussed by you. You have worked in CICC for a long time. Can you talk about stock index futures?

Zhang Shenfeng: stock index futures is a typical imported product. It has been running for more than 40 years in a dozen mature markets, such as the United States and Europe. It is an essential shock absorber for the healthy operation of the stock market. It can not only show the function of stock price discovery, but also hedge the stock market and hedge risk. It helps to support more capital to enter the market and is conducive to cultivating a large number of institutional investors. From the micro perspective, due to the special multiplier effect, most of the time is much lower than that of the stock market. It seems to be helping to rise and fall. But in the long run, it can make the stock market less or less, and reduce the volatility of the stock market. For the 10 years from April 16, 2010 to April 15, 2020, stock index futures rose more or less than the stock market almost every day, but the stock market volatility was 23.42% over the past 10 years. The stock market volatility was 29.51% without the matching of index futures and 8 years from 2002 to 2010. Stock index futures reduced the volatility of the stock market by 20.64%, which is equivalent to the equivalent substitution in mathematics. The index is the shadow of the stock market and does not determine the ups and downs of the stock market. Of course, as a supporting tool of stock market, futures index is not suitable for speculating by too many retail investors, and its function will be affected if speculation is excessive. The abnormal fluctuation of stock market in 2015 was a spiral decline caused by the forced compulsory liquidation of the over-the-counter financing platform. Not long ago, the US stock market plummeted and the 4 time was blown. No matter in the US or in China, no one accused stock index futures.

Twenty-first Century: Recently, there are many suggestions on the drawbacks and improvements of the Shanghai Composite Index. I know you have expressed your views on this issue. I would like you to introduce it again.

Zhang Shenfeng: now there are the following aspects in the discussion of the Shanghai Composite Index in the society: first, the Shanghai composite index is calculated by all companies and all the capital stock, which is not consistent with the market trading situation; two, the whole caliber includes a lot of rotten companies, such as the ST class, so it is better to have a selective stock index; three, the time when the initial stock index entered the index is the eleventh trading day after the listing. They are more likely to be fired up, the high price is included in the drag index, and the four is the weight of the company.

The Shanghai composite index was compiled at the beginning of the market in 1991. It used the total market value (price * total capital stock) as the calculation caliber, because the state-owned shares and legal person shares could not be circulated at that time, and the circulation shares accounted for only 1/4. After the split share structure reform from 2005 to 2007, state-owned shares and legal person shares were gradually allowed to circulate. A large number of state-owned enterprises were listed here, some enterprises pulled up the index, and some enterprises pulled down the index. The most extreme, such as PetroChina, has only 2.5% of tradable shares, but it is still accounted for by 100%, which is equivalent to 40 times leverage, which can greatly increase the index, but the stock price fell sharply after the index was taken into account, and the index dropped by nearly 1000 points. "Two barrels of oil, four big businesses" and so on all have this kind of influence, a large number of non tradable shares transfer to make the Shanghai Composite Index gradually from overestimation to underestimation.

Twenty-first Century: can we give a more detailed example of exponential distortion?

Zhang Shenfeng: Taking the stock market operation in 2007 and 2015 as an example, the highest point of Shanghai Composite Index in October 16, 2007 is 6124 points, the closing price of that day is 6092 points, and June 12, 2015's highest day closing price is only 5166 points, but this time accurately reflects the true face, and the closing price of Shanghai Composite Index simulated by free market value is as high as 8869 points, which is 3703 points higher than the former. But shareholders, including many market participants, are not aware of this phenomenon. They generally believe that the index is nearly 20% lower than 6124 points 8 years ago, leading to a lack of market risk and continuing to push up the stock market. Once the high stock market is withdrawn, the OTC financing platform is automatically forced to liquidate the stock market, leading to a spiral downward spiral in the stock market. It can be seen that in China's stock market, where the majority of the retail investors are in the majority, a real index of risk and a comparative value is of great significance.

Except for the Nasdaq composite index, the most representative index abroad is the constituent index. Another ideal method is to adopt the full Sample Firms and the stock market value. Due to special reasons, the Shanghai composite index was overvalued before 2006, which was roughly balanced in part of 2006 and 2007, and underestimated after the second half of 2007. The general characteristics are large volume of market transactions, high index, "underestimation", low market volume, low index and "underestimation". In the relatively stable market situation in recent years, the index of "concealment" is mostly around 2000, which is also the main reason why some international and domestic people often issue misleading remarks such as "ten years' zero increase" in China's capital market, "A share, Xiong Guan and the whole world".

Twenty-first Century: do you have any specific suggestions or suggestions for improvement?

Zhang Shenfeng: there are two suggestions worthy of further research and demonstration: first, direct release of the "upper class composite" which is simulated by free circulation market value after January 1, 2006, so as to seamlessly link up with the original index, and solve problems with the root of the problem once and for all. The two is to maintain the existing index and make no major changes, and then use the full caliber free market value weighted method to compile " The Shanghai Stock Exchange Index "has formed a parallel situation between the" upper class composite index "and the Shanghai Composite Index, which can be used by international, domestic and market parties. No matter how we do it, we must face the society and publicize and dispel doubts.

For 30 years, the registered bull market has appeared.

Listed companies are the cornerstone of the capital market and the basic market of China's real economy.

Twenty-first Century: you said last year that you support the listed companies in building the "one belt and one way" initiative, and how to understand the role of "goose geese"?

Zhang Shenfeng: listed companies, as the outstanding representatives of Chinese enterprises and the backbone of China's economy, are the "basic plate" of the real economy, the "convertor" of economic development kinetic energy, the "vanguard" of improving the modern enterprise system and fulfilling social responsibilities, and also the main force in building the "one belt and one road". In recent years, more and more high quality listed companies have focused on national initiatives, combined with their own business, and brought into full play the advantages of technology, talent, management and capital, and actively participated in the construction of "one belt and one road", and emerged a large number of excellent models. For example, there are both Chinese architecture and China Railway, which are longer than infrastructure construction. There are typical Wanhua chemistry and Hebei iron and steel in overseas direct investment, Hikvision and ZTE, which focus on high-tech industries, and conch cement, Sany, and voice holdings, which are developing diversified markets. By actively participating in the "one belt and one way" construction, these companies have not only realized their own wealth and experience accumulation, but also effectively promoted the economic development, employment promotion and improvement of people's livelihood of the host country, and created a good situation of mutual benefit and win-win economic and social benefits.

Twenty-first Century: there are many expectations of the stock market in the community. Please talk about your vision of the A share market.

Zhang Shenfeng: China's stock market has been running for 30 years, during which there were 4 big bull and bear transition periods. The high points in the market are in February 1993, June 2001, January 2008 and June 2015 respectively (Note: Wind total A index). The high point interval shows a fluctuation of 6 to 7.5 years. At present, it is in the early stage of the fifth bull market, and the fifth bull bear conversion period began after the 2440 point of Shanghai Stock Exchange in January 2019. At present, the overall market PB is 2.55, which has been in a relatively low historical position for a long time.

With the successful operation of the registration board system and the gradual opening of registration system reform, China's capital market has grasped the nose of promoting economic innovation and development. Now the Party Central Committee and the State Council's macro control art is more skilled and efficient, monetary policy is more flexible and moderate, and the Finance Committee and the SFC's construction and reform measures are more orderly. It can be optimistic that the market is gaining momentum after several years of hard accumulation, with a variety of bad factors at home and abroad. The registered bull market characterized by the full development of the economy and capital markets is coming slowly. In short, I have full confidence in the future of China's capital market.

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