Beijing sends strongest signal so far to restore market confidence

Financial stability & development part of implementing "two establishments" & "two upholds"

In the clearest signal from Beijing to restore market confidence so far, a special meeting of the Financial Stability and Development Committee of the State Council was held on Wednesday, March 16, chaired by Politburo Member and Vice Premier Liu He.

The readout from the meeting has now - almost instantly - turned the Chinese mainland stock markets into positive ground, in stark contrast with the pessimism that has clouded the Chinese market in recent days.

Below is Pekingnology’s translation and brief explanations of the readout, which is also pasted at the end.

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BEIJING, March 16 (Xinhua) -- On March 16, the Financial Stability and Development Committee of the State Council held a special meeting to study the current economic situation and capital market issues. The meeting was chaired by Liu He, a member of the Political Bureau of the CPC Central Committee, Vice Premier of the State Council, and Director of the Financial Stability and Development Committee, and comrades in charge of relevant departments attended the meeting.

The meeting pointed out that in the current complex situation, the most critical thing is to adhere to the “development is the Communist Party of China's top priority in governance”, adhere to the "economic development as the central task", adhere to deepening reform and expanding opening-up, adhere to market-oriented, rule-of-law principles, adhere to the "two unwavering", effectively protect property rights, fully implement the spirit of the Central Economic Work Conference [Pekingnology] and the deployment of the "Two Sessions" [Pekingnology], coordinate epidemic/COVID-19 prevention & control and economic and social development, maintain the economic operation within a reasonable range, and maintain the smooth operation of the capital markets.

[Comment: Development is the Communist Party of China's top priority in governance and economic development as the central task are time-honored principles that stress the utmost importance of economic development for the CPC and the country.]

The meeting studied related issues. On the macroeconomic operation, we must implement the decision and deployment of the Party Central Committee, and effectively vitalize the economy in the first quarter. The monetary policy shall take the initiative in response, new loans shall maintain moderate growth. Regarding real estate enterprises, we must promptly study and propose a strong and effective response program to prevent and resolve risks, and propose complementary/supplementary measures that transform to a new development model. 

Regarding Chinese companies listed in the United States, the Chinese and U.S. regulators have maintained good communication and have made positive progress, and are working to form specific cooperation programs. 

[Comment: between China’s CSRC and the SEC.]

The Chinese government continues to support all types of enterprises to go public outside China. 

Regarding the governance of the platform economy, relevant departments should improve the established programs in accordance with the guidelines of orientation towards the market, rule of law, and internationalization, adhere to the principle of seeking progress while maintaining stability, and through standardized, transparent, and predictable regulation, steadily promote and complete/finish as soon as possible the rectification of large platform companies, with "red" and "green" lights set, to promote the stable and healthy development of the platform economy and improve international competitiveness. 

[Comment: The rectification of large platform companies, namely China’s Big Tech, will be completed/finished asap.]

On the issue of stability in Hong Kong's financial market, the regulators of the mainland and Hong Kong should strengthen communication and collaboration.

The meeting stressed that the relevant departments should effectively assume their responsibilities, actively introduce policies that are beneficial to the market, and be cautious in introducing contractionary policies. Hot issues of market concern should be responded to in a timely manner. Any policy that has a significant impact on the capital market should be coordinated with the financial management departments in advance, to maintain the stability and consistency of policy expectations. 

[Comment: Departments other than the financial management departments be aware.]

The Financial Stability and Development Committee of the State Council will, according to the requirements of the Party Central Committee and the State Council, increase coordination and communication, and ensure accountability is held when necessary.

[Comment: The departments who failed in implementing this will be held responsible and suffer consequences.]

Financial institutions must look at the big picture and firmly support the development of the real economy. Long-term institutional investors are welcome to increase their shareholdings. All parties/departments/involved must have a deep understanding of the significance of the "two establishments", resolutely achieve the "two upholds", maintain the long-term trend of China's healthy economic development, and jointly maintain the stable development of the capital market.

[Comment: Getting the stable development of the capital market right is a matter related to "two establishments" and "two upholds".

The CPC Central Committee’s Resolution on the Major Achievements and Historical Experience over the Past Century approved at the 6th plenary session of the 19th Central Committee made it clear that “To establish the core leadership of comrade Xi Jinping in the CPC Central Committee and the whole Party, and establish the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era reflects the common wish of all Chinese people—the CPC members, the People’s Liberation Army and all ethnic groups, and are of decisive significance to the development of the CPC and China in this new era, and to the historic process of the great rejuvenation of the Chinese nation.

The Two Upholds refer to upholding General Secretary Xi Jinping’s core position on the CPC Central Committee and in the Party as a whole, and upholding the Central Committee’s authority and its centralized, unified leadership.]

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The readout in Chinese

刘鹤主持国务院金融委会议研究当前形势

新华社北京3月16日电  3月16日，国务院金融稳定发展委员会召开专题会议，研究当前经济形势和资本市场问题。会议由中共中央政治局委员、国务院副总理、金融委主任刘鹤主持，有关部门负责同志参加会议。

　　会议指出，在当前的复杂形势下，最关键的是坚持发展是党执政兴国的第一要务，坚持以经济建设为中心，坚持深化改革、扩大开放，坚持市场化、法治化原则，坚持“两个毫不动摇”，切实保护产权，全力落实中央经济工作会议精神和全国“两会”部署，统筹疫情防控和经济社会发展，保持经济运行在合理区间，保持资本市场平稳运行。

会议研究了相关问题。关于宏观经济运行，一定要落实党中央决策部署，切实振作一季度经济，货币政策要主动应对，新增贷款要保持适度增长。关于房地产企业，要及时研究和提出有力有效的防范化解风险应对方案，提出向新发展模式转型的配套措施。关于中概股，目前中美双方监管机构保持了良好沟通，已取得积极进展，正在致力于形成具体合作方案。中国政府继续支持各类企业到境外上市。关于平台经济治理，有关部门要按照市场化、法治化、国际化的方针完善既定方案，坚持稳中求进，通过规范、透明、可预期的监管，稳妥推进并尽快完成大型平台公司整改工作，红灯、绿灯都要设置好，促进平台经济平稳健康发展，提高国际竞争力。关于香港金融市场稳定问题，内地与香港两地监管机构要加强沟通协作。

会议强调，有关部门要切实承担起自身职责，积极出台对市场有利的政策，慎重出台收缩性政策。对市场关注的热点问题要及时回应。凡是对资本市场产生重大影响的政策，应事先与金融管理部门协调，保持政策预期的稳定和一致性。国务院金融委将根据党中央、国务院的要求，加大协调和沟通力度，必要时进行问责。金融机构必须从大局出发，坚定支持实体经济发展。欢迎长期机构投资者增加持股比例。各方面必须深刻认识“两个确立”的重大意义，坚决做到“两个维护”，保持中国经济健康发展的长期态势，共同维护资本市场的稳定发展。