[China Securities Regulatory Commission Chairman Wu Qing delivered a speech at the opening ceremony of the first China Capital Market Academic Annual Conference] On November 14th, China Securities Regulatory Commission Chairman Wu Qing delivered a speech at the opening ceremony of the first China Capital Market Academic Annual Conference. The following is the full text of the speech: Dear Vice Chairman Ogawa, Mayor Zhongming, Vice Mayor He Qing, Dear Chairman Davis, Professor Sargent, Professor Li Yang, Professor Jiang Wei, distinguished experts, Ladies and gentlemen, friends: Good morning everyone! First of all, on behalf of the China Securities Regulatory Commission and the China Capital Market Society, I would like to warmly welcome all guests at home and abroad to the first China Capital Market Academic Annual Conference! Sincerely thank you all for your long-term concern and support for China’s capital market! In November, Shanghai is filled with gorgeous autumn colors and golden sycamore trees. For people in the capital market, "Indus" and "November" have special meaning. The Sycamore Agreement more than two hundred years ago (1792) laid the foundation for self-regulatory rules for the development of modern capital markets. In November 42 years ago (1984), Shanghai Feile Audio, "the first stock in New China", was publicly issued to the public. In November 36 years ago (1990), the Shanghai Stock Exchange was established in the nearby Pujiang Hotel. Eight years ago (2018) in November, President Xi Jinping announced the establishment of the Science and Technology Innovation Board and the pilot registration system at the opening ceremony of the first CIIE, ushering in a new chapter in the reform and development of China's capital market. At present, the century-old changes in the world are accelerating, a new round of scientific and technological revolution and industrial transformation are accelerating breakthroughs, and the global governance system is undergoing profound changes. Under this background, the first academic annual conference of the China Capital Market Society is held in the hope of building a professional, high-end, international exchange and dialogue platform, gathering wisdom and efforts, and playing an active role in deepening academic research on capital markets, enhancing ideological consensus, and promoting high-quality development. I would like to take this opportunity to share some knowledge and experience with you. 1. With a solid foundation, positive and profound changes have taken place in China’s capital market The establishment and development of the capital market is a major strategic decision made by the Communist Party of China and the Chinese government from the perspective of overall economic development and reform and opening up. Over the past 36 years, China's capital market has always resonated with China's economic reform, coexisted and prospered with the development of the real economy, and continued to grow and thrive through exploration and innovation. Large, the scale of the stock, bond, and futures markets currently ranks among the top in the world, and has gradually developed into an important market that roughly matches the size of the Chinese economy and has global influence. It has played an irreplaceable and important role in optimizing resource allocation, promoting the formation of innovative capital, and promoting the transformation of economic development momentum. First, the basic institutional structure has basically taken shape. With the securities law, company law, fund law, futures and derivatives law as the main body, the "four beams and eight pillars" of the capital market legal system have been basically completed. Since the new century, a "Nine National Regulations" have been issued approximately every 10 years to promote the overall and in-depth optimization of the capital market system of rules and regulations. In particular, the new "Nine National Regulations" released by the State Council in 2024 systematically reshape regulatory concepts and underlying logic, leading the capital market to take new solid steps in risk prevention, strong supervision, and promotion of high-quality development. Second, the multi-level market system is increasingly improving. The construction of the capital market sector continues to advance in depth, and the equity market system with misaligned development and complementary functions is basically sound, and the total market value of A-shares has exceeded 100 trillion yuan. China’s bond market, which is composed of exchanges and the inter-bank market, exceeds 210 trillion yuan in size, and science and technology bonds, green bonds, and REITs accurately meet the national strategic needs. It covers more than 170 varieties of futures and options in commodities and finance, basically covering the major industrial fields of the national economy. Third, the investment and financing structure is more coordinated and adaptive. On the investment side, since 2024, the net purchase of A-shares in social security, insurance, and annuities has exceeded 1.5 trillion yuan, the strength of professional institutions has steadily grown, the supply of indexes, ETFs and other products has continued to enrich, and the institutional system for long-term money and long-term investment has continued to improve. On the financing side, the inclusiveness and adaptability of systems such as issuance and listing, mergers and acquisitions, and refinancing continue to improve. Promoting profound adjustments to China's financial structure, in the first nine months of this year, direct financing such as stocks and bonds accounted for nearly 50% of the incremental social financing. Fourth, listed companies continue to consolidate their trend towards innovation and advantage. The adaptability of the structure of listed companies to industrial transformation and the construction of a modern industrial system has been significantly enhanced. Currently, among the more than 5,500 A-share listed companies, the number, revenue, and market value of companies in the new economy sector account for more than half of the entire market. At the same time, the awareness and ability of listed companies to return investors has been effectively improved. More than two years since the promulgation of the new "Nine National Regulations", listed companies have distributed nearly 7 trillion yuan in dividends, which is about three times the equity financing in the same period. Buybacks and cancellations have increasingly become a normal choice for some listed companies. Fifth, the pattern of open cooperation continues to expand and deepen. We will adhere to equal emphasis on "bringing in" and "going out" and steadily promote the all-round opening of markets, institutions, and products. Mechanisms such as interconnection are constantly being improved, institutional shareholding ratios are fully liberalized, qualified foreign investors cover more than 40 countries and regions around the world, and more than 140 futures and options are available for foreign trading. Strengthen cross-border regulatory cooperation and crack down on illegal cross-border business development and other illegal activities in accordance with the law. The positive interaction between high-level openness and high-level security is deepening day by day. Generally speaking, the continuous reform and development of China's capital market and its increasingly improved functions are not only an inherent requirement for China to deepen reform and opening up and accelerate the improvement of the socialist market economic system; it is also the only way to adapt to new trends in global economic and financial development and promote the high-quality development of China's finance. It has laid a solid foundation for us to promote high-quality development and deepen mutually beneficial cooperation at a new starting point. 2. Observe and take advantage of the situation and accurately grasp the opportunities and challenges in the capital market under the great changes. At present, the international situation is turbulent, artificial intelligence is rushing in, and Chinese-style modernization is accelerating in an all-round way. The capital market must not only shoulder its historic responsibilities, but also steadily respond to unprecedented severe challenges. This requires us to work together to identify the bright direction and seek common development. First, adapting to new changes in global governance requires capital markets to actively respond to various external uncertainties. In the intertwined world of events, the global economic and trade pattern and governance system are changing from old to new, and rules are being restructured. Geopolitical conflicts have been delayed and repeated, and uncertainty in the policy directions of major economies has increased. The global capital market is undergoing a new round of asset repricing and rebalancing. This requires us to actively implement global governance initiatives, deepen cooperation in capital market supervision, jointly study how to deal with uncertain and unpredictable factors, enhance the supply of deterministic institutions, and continuously improve the ability and resilience of the capital market to withstand major risk events such as various "black swans" and "grey rhinoceros". Second, in the face of a new wave of technological revolution, capital markets need to better coordinate development and security. In this round of technological revolution represented by artificial intelligence, the boundary from technological innovation to industrial transformation has become more blurred, and the characteristics of "large scale, large volume, and large investment" have become more prominent. Practice has proved that the unique mechanisms of income and risk allocation, pricing, transactions, incentives and constraints of equity financing and securitization financing are more in line with the new laws of innovation in the science and technology industry. Major capital markets around the world are accelerating reforms and adjusting systems, and strive to guide the concentration of capital and resources in innovation fields. It should also be noted that as a disruptive technology, artificial intelligence has deepened the understanding of various parties in terms of technical routes, business prospects and potential risks, and the differences have also increased. It is necessary to conduct an in-depth study and judgment of its far-reaching impact and challenges on the economy, finance and capital markets, insist on seeking advantages and avoiding disadvantages, and strive to achieve a dynamic balance that supports innovation and is safe and controllable. Third, to fulfill the mission of China-style modernization and financial power, we need to accelerate the construction of a strong capital market. On the one hand, the "15th Five-Year Plan" period is a critical period for China to accelerate the construction of a modern industrial system. The transformation and upgrading of traditional industries, the cultivation and growth of emerging industries, and the forward-looking layout of future industries, whether it is stock adjustment or incremental discovery, all require the capital market to provide full-chain, relay-style financial services to further promote the deep integration and high-level circulation of technology, industry, and capital. On the other hand, China's financial structure is undergoing profound changes, with demographic changes, new trends in asset allocation in a low-interest rate environment, and deep rebalancing. It is necessary to continue to enrich capital market investment products and tools, further unblock investment channels, and better meet the growing wealth management needs of various entities. Fourth, based on the new development stage of China's capital market, greater efforts are needed to deepen reform and expand opening up. Currently, China's capital market is moving towards a critical stage of achieving effective improvement in quality and reasonable growth in quantity. Judging from international experience, this process not only contains huge development potential, but also faces the arduous task of improving adaptability. For example, the institutional inclusiveness of the development of new productive forces needs to be improved, the market structure and investor structure need to be optimized, the basic institutional mechanisms need to be further improved, the market's inherent stability and risk prevention capabilities still need to be enhanced, etc. To solve these institutional and mechanism contradictions, we need to always adhere to goal orientation and problem orientation, deepen reforms, actively explore, and accelerate the formation of a new pattern of high-quality development of the capital market. 3. Adapt to changes and respond to capital market issues of the era with high-quality research The national "15th Five-Year Plan" outline and the "15th Five-Year Plan" for financial power have made strategic arrangements for the capital market. The China Securities Regulatory Commission has also clarified the development goals and key measures of the capital market during the "15th Five-Year Plan". To promote the reform, development and stability of the capital market under the new situation, there are many major theoretical and practical issues that require in-depth study. The three sub-forums this afternoon will have in-depth discussions on topics such as comprehensive reform of investment and financing, artificial intelligence, and opening up to the outside world. Let me first draw out some ideas and seek advice from everyone on several issues that require in-depth study in the practice of market development. The first is to further deepen the research on the development characteristics and laws of China’s capital market. There are more than 200 million stock investors and more than 800 million fund holders in the A-share market. This national and market situation is unique in the world. This requires us to not only study and learn from the general laws of mature market development in market construction, but also conduct in-depth research into China’s market characteristics and structural problems it faces. While adhering to the direction of market-oriented, legal-based, and international reforms, we must coordinate the dialectical relationships between stability and progress, efficiency and fairness, development and security, and firmly follow the path of financial development with Chinese characteristics. The second is to further deepen research on long-term mechanisms for market stability. China's capital market has never been as highly interconnected and resonant with the global capital market as it is today. In the face of a highly uncertain external environment and imported risks, we need to strengthen our understanding of regular changes in the global capital market, the evolution of asset pricing logic, and risk transmission linkages, further strengthen the research and response to cross-border, cross-market, and cross-industry risks, systematically build stable mechanisms, stable forces, and stable ecology, and effectively prevent abnormal market fluctuations. The third is to further deepen the research on the inclusive adaptability of the system. The Opinions on Developing New Productivity issued by the Party Central Committee and the State Council not long ago clearly stated that we should promote the innovative allocation of production factors and promote the improvement of total factor productivity. As an important platform for market-oriented resource allocation, the capital market must further study and deepen the comprehensive reform of investment and financing, accelerate the construction of a direct financing system that adapts to the laws of innovation and industry, and coordinate the synergistic functions of private markets and public markets, stock markets and bond markets. In particular, it is necessary to scientifically grasp the pace while strengthening research on institutional adaptability and risk response mechanisms for the issuance and listing of large and new technology companies. At the same time, it is necessary to comprehensively and accurately understand the scientific connotation of the development of new productive forces, conduct in-depth research to support the listing and development of high-quality enterprises in different fields such as new consumption and traditional industry upgrading, continuously improve and optimize the structure of listed companies, and promote balanced and coordinated development of the market. The fourth is to further deepen research on the two-way empowerment of artificial intelligence and capital markets. It is undeniable that the systematic and profound impact of artificial intelligence on scientific research, industrial innovation, production and life is occurring rapidly, but its long-term impact still needs to be continuously observed in combination with technology iteration, scenario implementation, organizational change and effective governance. The capital market must not only actively adapt to new technological changes, strengthen institutional research in aspects such as valuation and pricing, and information disclosure, accurately support the development and growth of relevant "hard technology" enterprises and effectively enhance social welfare; it must also conduct in-depth research on the transmission and mapping of artificial intelligence on the reshaping of productivity and production relations in the capital market, accelerate research on liability identification, data security, customer protection, and system risks, effectively prevent key issues such as algorithm black boxes, AI network attacks, and improve the resilience of financial infrastructure, and promote the safe and standardized application of artificial intelligence. The fifth is to further deepen the research on market microstructure. Micro-level issues such as investor structure and behavior, price discovery process, liquidity and transaction costs are closely related to macro-level results such as market stability, market fairness, and market efficiency. In order to further improve market pricing and development quality, it is necessary to conduct in-depth research on improving the capital supply structure, accelerate the development and expansion of long-term capital and patient capital; conduct in-depth research on improving the expected guidance mechanism, and reduce market fluctuations caused by "herding effect" and "short-term" transactions; and also conduct in-depth research on the optimization of institutional rules such as quantitative trading and share reduction and fair and reasonable regulatory arrangements to effectively protect the legitimate rights and interests of investors. Sixth, we will further deepen the participation of capital markets in research on global financial governance. Mature capital markets are naturally open. As the global financial system enters a new stage of redefining rules, it is necessary to strengthen research on issues such as market opening, rule formulation, and regulatory cooperation, focusing on topics such as artificial intelligence, financial stability, and sustainable finance, and promote the construction of a new ecosystem of global financial governance with collaborative governance. At the same time, we must further study and improve the facilitation of cross-border investment and financing to provide international investors with more supply of high-quality Chinese assets. Those present today are all great scholars and experts in various fields related to the capital market, as well as many outstanding entrepreneurs and industry figures. The issues just mentioned are only for exchange and discussion. I would like to take this opportunity to make some suggestions on strengthening capital market research: First, strengthen the integration of cutting-edge dynamic research and basic theoretical research. The capital market situation is changing rapidly, and there are many "dilemmas" and "difficulties" that require calm observation and strengthened follow-up analysis. At the same time, we should accelerate theoretical innovation and come up with effective countermeasures or ways to deal with them. The second is to strengthen the integration of academic research and policy practice research. In view of the pain points and blockages that restrict the development of the capital market under the new situation, we will carry out joint research based on academics and practice. We also hope that everyone will further strengthen comparative research on the history and system of the capital market to better lead and promote policy formulation and system improvement. The third is to strengthen the integration of traditional research and new research paradigms. Artificial intelligence is reconstructing scientific research theories and paradigms. It is necessary to effectively promote innovation in research methods, tools and organizational methods, promote interdisciplinary and cross-field research collaboration, and continuously improve the scientific and professional level of capital market research. Dear guests and friends! Today's first annual conference is just the beginning. In the future, academic annual conferences must be normalized and institutionalized, and each session shall achieve quality, level, and influence, and strive to become an important platform for gathering wisdom, stirring up ideas, and building consensus; an important window for displaying high-quality academic achievements in the capital market; and an important high ground for leading theoretical innovation in the capital market and serving high-quality development! Let us join hands to contribute more academic strength and Chinese wisdom to the reform and development of the global capital market! Finally, I wish this annual academic conference a complete success! I wish all guests smooth work and happy life! Thank you all!