President Cheng ｜ Finance ｜ Daily ｜ 20201115

The MPF is related to the retirement life of citizens. Investable assets are subject to certain restrictions for risk management. This is normal. Therefore, the upper limit of holdings on the two exchanges in Shanghai and Shenzhen is only 10%. The reason is that the Chinese capital market is not fully open. The Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect have been in existence for many years and the MPFA reiterated that the conditions have not been ripe for many years.

However, Xu Zhengyu, the director of the Treasury Bureau, ordered the Shanghai and Shenzhen stock exchanges to become the MPF’s “approved exchanges”, and the 10% ceiling curse has disappeared. Has director Xu received top-secret news about the opening of China’s capital account? If not, what was the turning point? How to remedy the liquidity risk arising from the purchase and sale of shares? Director Xu explained: “Earlier, I communicated with the industry and heard the opinion that the degree of internationalization of A shares is increasing. After coordinating with the MPFA and conducting research, the Shanghai Stock and Shenzhen have been included in the MPFA’s approved stock exchanges list. Conditions are ripe. “

Big brother, since QFII in 2002, the A stock market has been continually internationalized. The Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect were opened in 2014 and 2016 respectively. Do you hear opinions that the degree of internationalization of the A-share has increased? Does that mean that MPFA has been deaf for many years? Then Director Xu continued: after coordinating and conducting research with the MPFA, the conditions for the Shanghai and Shenzhen exchanges to become “approved exchanges” are ripe. The secretary must have injected him with pig hormones, so she gets familiar with them right away?

The MPFA’s subsequent response was also amusing, explaining that the Shanghai and Shenzhen Stock Exchanges were included on the basis of “the most recent review and evaluation, with reference to a basket of specific factors related to the exchange and market review criteria” . What are the factors? What criteria? More interestingly, in the early years, Huang Youjia, chairman of MPFA, explained that A shares have not been fully opened because the demand from the sector is not great. If you want to invest in China, you can also buy H shares. Yes, director Xu all boasted that A shares represented only 1.12% of MPF’s total assets. What about the sudden demand for A-shares by migrant workers? Surely it is because there is a huge demand for MPF in A shares, so the people of Hong Kong have to bring their hard-earned money to support the market?

Director Xu will only help you to open a channel for sending pension funds to Poland and Indonesia! The total market value of the companies listed on the Warsaw Stock Exchange is only about HK $ 1 trillion and the Indonesian Stock Exchange market value is only HK $ 3 trillion. However, the reason for being included in the “Approved Exchange” is the same as two transactions with a market value of tens of trillions. However, politics can be called illogical.

Indeed, a lot of things in MPFA over the past 20 years have been messy and the industry laughed. Seeing that Secretary Xu was so uncomfortable this time, President Cheng came up with a method to help the industry, then petitioned directly to the Bureau of Finance and the Treasury, and waited for Secretary Xu to “listen”. letting the Freestyle admin framework bypass the MPFA, everything was fine Quickly fixed.

President Cheng

fb.com/IFC89