Liu Xiaobo: How To Improve The Supervision System Of The Stock Market

The financial market is a market with highly asymmetric information, so regulation is still a problem worth studying. Our regulatory system has always been controversial. For example, in the stock market, from the 1990s to the early 20th century, there was a big debate about how to improve the supervision system of the stock market.

Gao Xiqing, the CSRC at that time, once put forward a very important point that there were great defects in the path of China's stock market supervision system. That is to say, the supervision is not mainly on the mandatory information disclosure system, but on the substantive approval, which makes the entire securities market become a rent-seeking field.

The stock market should be based on restoring the financing function of the market, fully protecting the rights and interests of investors, giving full play to the regulatory role of the market mechanism, strengthening the construction of basic systems such as issuance, delisting and trading, effectively strengthening market supervision, improving the quality of information disclosure, and severely cracking down on insider trading, stock price manipulation and other acts.

It can be seen that the stock market is indeed preparing for the reform of the registration system, and starting from the foundation System construction Start with supervision. In this sense, the reform of the registration system has not stopped, but is accelerating. However, the Central Committee attaches great importance to this matter and is determined to do it well on the basis of the foundation, so it is still difficult to determine the time point for the final launch.

The Third Plenary Session of the 18th CPC Central Committee made a very correct decision in principle on this issue. It is necessary to shift from pre supervision to in-process and post supervision, from supervision based on approval to compliance supervision. In accordance with the rules, there are clear rules, and violations of the rules will be dealt with and reversed.

Wu Jinglian is not only an important figure in China's economic circles today, but also has a legendary life experience. His parents and stepfather are both important figures in China's news history, which has had a certain impact on the history of the Republic of China to the new China.

Wu Jinglian's most important comment on the stock market before was the "Casino Theory" published in January 2001. At that time, major cases were successively exposed in China's stock market. In an interview with CCTV, Wu Jinglian said:

The stock price of China's stock market is abnormally high, and quite a number of stocks have no investment value. At a deeper level, the illegal activities prevailing in the stock market have made investors not get returns and become a paradise for speculation. Some foreigners say that China's stock market is very much like a casino, and very irregular. There are rules in the casino, for example, you can't look at other people's cards. Here, some people can see others' cards, cheat or cheat. The activity of speculating and manipulating stock prices can be said to be the peak.

Wu Jinglian's remark was once extended and summarized as "pushing back and starting again", which later triggered a nationwide debate. In February 2001, five scholars, including Li Yining, Xiao Zhuoji, Dong Fureng, Wu Xiaoqiu and Han Zhiguo, held a symposium to respond and refute Wu Jinglian's views, leading the discussion to a climax. At that time, I was also instructed to write articles on the paper media where I worked to refute Wu Jinglian's views. Now I want to be ashamed.

So why did Wu Jinglian bombard the stock market again after 15 years? Is his opinion right? What is the background and what changes will it bring to China's stock market?

from Wu Jinglian In our recent conversation, we can read the following meanings:

1. Wu Jinglian alluded to the debate 15 years ago, and history has proved that his views at that time were largely correct. This can be confirmed only by the launch, advocacy, climax, collapse and rescue of the "policy bull market" last year. In other words, China's stock market has made little progress in the past 15 years, except that its market value has increased by N times. However, due to the introduction of short selling mechanism and the emergence of program trading, there is a large area of capital allocation, so retail investors are deprived of property more quickly and ruthlessly.

2. He referred to Gao Xiqing's point of view. Gao Xiqing is a bachelor and master of Beijing Institute of Foreign Trade, and a doctor of law from Duke University in the United States. He once served as a lawyer on Wall Street, and later served as the chief lawyer, director of the issuance department, and vice chairman of the CSRC. In December 2013, at the "Sanya International Forum on Finance and Economics", Gao Xiqing held Approval power He said:

When we were in a meeting just a few days after the establishment of the CSRC, I felt that the CSRC should not have the power to approve the issuance, but should be released. But someone told me that I could not say this, or I would destroy the job of the CSRC. I knew that the CSRC still had a job problem, and that was when the concept came into being.

Gao Xiqing's point of view is that the CSRC should not have the power of examination and approval, which should be handed over to the market. The main responsibility of the CSRC is supervision, and the law enforcement must be strict and the law breaking must be prosecuted. He vividly told us the essence of administrative approval about the "job of the CSRC".

3. Wu Jinglian's so-called "the Third Plenary Session of the 18th CPC Central Committee made a very correct decision in principle on this issue" refers to the reform of the IPO registration system, that is, to return the right of enterprises to list to enterprises and the right of stock market fluctuations to the market. Both Wu Jinglian and Gao Xiqing strongly supported the reform of the registration system, which was written into the "Decision on Deepening Reform" adopted at the Third Plenary Session of the 18th Central Committee of the Communist Party of China. However, the reform was postponed because of the bull market of policies launched rashly last year.

It can be seen that after the "authoritative personage" said in the People's Daily on May 9 that the stock market, property market and foreign exchange market had returned to their original meaning, some economists began to support the reform of the registration system again. This idea is actually in line with the latest judgment of the top management. We might as well review the "authoritative personage"'s discussion on the stock market:

However, from the perspective of national strategy, it is necessary to move forward from the "money printing era" (activating real estate and promoting the urbanization process through the over issuance of currency) to the "stock printing era" (activating mass entrepreneurship and innovation through the reform of the registration system and the approval system), and there is no way back.

I hope that China's stock market will no longer have a "policy bull market", but will usher in a "market bull market" as soon as possible through reform.