Regulators speak on China's financial development at Lujiazui Forum

The 15th Lujiazui Forum opened in Shanghai, China on Friday, with leaders from the country's top financial regulators, including the People's Bank of China (PBOC), the National Financial Regulatory Administration (NFRA), and the China Securities Regulatory Commission (CSRC) in attendance, conveying the latest regulatory signals.

The forum emphasized the following key points:

Continued Supportive Monetary Policy Stance

Pan Gongsheng, governor of the PBOC, highlighted the country's monetary policy in his keynote speech. 

Regarding China's current monetary policy stance, Pan indicated that the PBOC will use a comprehensive array of monetary policy tools, including reducing the reserve requirement ratio and lowering policy interest rates. These measures aim to create a favorable monetary and financial environment conducive to high-quality economic development.

Pan said the PBOC is studying how to implement government bond trading with the finance ministry. He stated that according to the Central Financial Work Conference, it is necessary to enrich the monetary policy toolbox and gradually increase the buying and selling of government bonds in the central bank's open market operations. 

"Including government bond trading into the monetary policy toolbox doesn’t mean we’ll do quantitative easing, but rather it’s a tool for injecting base money and regulate liquidity," said Pan.

Looking ahead, Pan stated that China's economy continues to recover positively, albeit facing challenges. The PBOC will continue to maintain a supportive monetary policy stance, strengthen counter-cyclical and cross-cycle adjustments, support the consolidation and enhancement of the economic recovery trend, and create a favorable monetary and financial environment for economic and social development.

High-Quality Development of the Insurance Industry

Li Yunze, head of NFRA, which oversees banks and insurance companies, noted that the insurance industry is encountering a historic opportunity for high-quality development and will play an irreplaceable role.

Li proposed three suggestions for the insurance industry on how to better serve Chinese-style Modernization:

1. Focus on innovative development to effectively serve new productive forces.

2. Improve coverage and effectiveness of insurance products tailored to improving people's well-being.

3. Enhance safety and emergency responses to continually improve social governance efficiency.

Li emphasized the vast potential and broad space in the Chinese insurance market, expressing confidence that through reform-driven vitality and development-driven solutions, the insurance industry can forge new paths and reach new heights.

High-Quality Development of Capital Markets

Wu Qing, chairman of the top securities watchdog, addressed three key issues in his keynote speech:

1. Actively embracing the development of new productive forces.

2. Supporting listed companies to enhance investment value.

3. Upholding investor protection throughout the entire process of capital market system construction and regulatory enforcement.

Wu highlighted ongoing efforts to deepen reforms in the STAR Market, emphasizing its focus on "hard technology," and outlined eight measures to further improve the issuance, underwriting, mergers and acquisitions, equity incentives, and trading mechanisms to better serve technological innovation and the development of new productive forces.

He also underscored the importance of enhancing transparency, governance standards, and communication with investors among listed companies. Wu stressed stringent regulatory measures against securities violations to maintain market fairness and stability.

Further, Wu addressed recent concerns regarding investor protection during delistings, affirming a commitment to thoroughly investigate and punish any illegal activities and collaborate with judicial authorities to ensure investors receive appropriate compensation.