This year, China's financial sector will usher in a higher level of opening-up. From the signals released during the recent two sessions, we can see that not only more opening-up policies such as the financial sector and the bond market are expected, but also some of the financial opening-up policies will be piloted in key areas such as the guangdong-hong kong-macao greater bay area, so as to explore replicable and extendable development paths for further financial opening-up. It is worth noting that there are signs of accelerated capital inflow in the short term, and it is particularly important to promote the financial opening while preventing the possible risks of cross-border capital flow.

This year's government work report calls for further easing of market access, narrowing the negative list of foreign investment access and allowing more fields to be operated solely by foreign capital. We will implement reform and opening up measures in the financial sector and other sectors and improve the policy of opening up the bond market.

Guo shuqing, chairman of the China banking and insurance regulatory commission (circ), said that opening up should be "sooner rather than later, sooner rather than later". He said the financial sector will continue to open up this year.

Pan gongsheng, deputy governor of the people's bank of China and director of the state administration of foreign exchange, said at a press conference at the second session of the 13th National People's Congress that China's bond market has been opening up rapidly, but the overall level is not high and there is great potential in the future. The next major task is to continue to steadily promote the opening up of the bond market and create a more convenient and favorable market environment for foreign investors to invest in and trade Chinese bonds. According to information disclosed by pan in public, the central bank is studying bond index ETF products under the connectivity mechanism and preparing to extend the settlement cycle, effectively supporting the special settlement cycle needs of foreign investors. In terms of foreign exchange hedging, the state administration of foreign exchange is studying and optimizing relevant arrangements for foreign investors to participate in foreign exchange hedging transactions.

Industry insiders pointed out that "" expanding opening-up" "will continue to be the key word of the financial year in 2019. Dong ximiao, deputy director of the chongyang institute of finance at renmin university of China, told the economic information daily that a series of better-than-expected financial opening policies and measures introduced since last year have sent a strong signal of opening up to the international community. With the acceleration of opening-up, China's financial industry will become the main force in building a modernized economic system and forming a new pattern of comprehensive opening-up, which will lead the financial industry into a new era of comprehensive opening-up.

A number of financial liberalization policies have been implemented over the past year. Since April last year, the NPC and CPPCC have issued more than 10 policy notices, covering market access and business expansion of foreign Banks, insurance companies, securities, funds and futures. At the same time, the pace of financial market opening has also accelerated. Taking the bond market as an example, in order to facilitate foreign investors to issue panda bonds in the Chinese market and foreign investors to invest and trade Chinese bonds, the central bank has improved a number of policy arrangements, including investment channels, taxation, accounting system, capital exchange and risk hedging. On January 31, bloomberg officially confirmed that Chinese bonds will be included in the bloomberg barclays bond index from April.

Under the background of full acceleration of opening up, some financial opening policies are also expected to achieve pilot projects in some key regions. The outline of the development plan for the guangdong-hong kong-macao greater bay area (hereinafter referred to as the outline) released a few days ago calls for orderly progress in financial market connectivity. Wang jingwu, director of the financial stability bureau of the people's bank of China, said in an interview with the media that the central bank has solicited opinions from various departments on the specific policies to implement the outline and completed the countersignature, which is expected to be issued soon.

He runsheng, account director of the bank of China macau branch, told the economic information daily that the guangdong-hong kong-macao greater bay area will explore replicable and scalable development paths for the financial sector to further open up to the outside world. "The outline covers a number of aspects related to orderly promotion of financial market connectivity. Therefore, it is necessary to continuously promote the use and flow of RMB in the bay area, and continue to do a good job in capital market opening, cross-border investment and unified supervision in the greater bay area." Run-sheng he said, for now, a large bay area of guangdong in capital circulation, there is still more policy limit, need to rise to the top of the national related policy system design level to be solved, such as the circulation in cross-border capital projects in the bay area, the bay area of domestic enterprises in foreign policy, guaranty and cross-border mortgage policy, financial institutions for cross-border transfer of assets.

Notably, capital inflows are accelerating as financial markets become more open. According to the data, the average monthly net purchases of northbound funds through the shanghai-shenzhen-hong kong stock connect rose to rmb60.54bn in the first two months of 2019, well above the 2018 monthly average of rmb24.52bn. By the end of February 2019, China's foreign exchange reserves have increased for the fourth consecutive month. "Given the more complex global risk landscape this year, cross-border capital flow regulation is expected to continue to be strengthened in 2019 to curb risk contagion in domestic and foreign markets." Said cheng shi, chief economist and managing director of icbc international.

According to the research on financial integration and development of guangdong-hong kong-macao greater bay area released by shenzhen institute of finance of special economic zone recently, to promote the financial integration and development of guangdong-hong kong-macao greater bay area, on the one hand, we should grasp the rhythm of the introduction of policies and design a fault-tolerant mechanism for financial reform and innovation. On the other hand, we need to establish a macro-prudential management framework to assess the risks of cross-border capital flows in terms of total volume, and carry out counter-cyclical regulation and control at an appropriate time. The rules of regulation and control should be published to the public in advance, so that the policy adjustments can meet market expectations and do not cause disorderly market shocks. We will not set limits on specific individual financial innovations, and encourage the bay area to carry out financial innovations in a more systematic and faster manner. We will explore ways to establish and improve a system for early warning, prevention and resolution of systemic risks in the bay area. We should promptly share financial risk information and strengthen cooperation in monitoring and analyzing cross-border capital flows.

Source: China financial information network