2016/9/8 More about chinese characteristics The Chinese Financial System Some say that none financial theory in the text book holds in Chinal) Can we talk about financial markets without mentioning the economic reform? 圈= Can we talk about the financial markets without mentioning the legal environment? an we understand the Chinese financial market without putting it in a global background? How Do we learn about the How Do We learn about the Chinese characteristics? Chinese characteristics? What are these in china By supplementary readings and anecdotes in the PBoC, CSRC, CIRC, CBRC, SAFE, MOF market ABC, ICBC, CBC, BOC, BoCom, AMC Do you understand why these happen, the ckground and the implications Shanghai Stock Exchange, Shenzhen Stock Exchange, SME Board, GEM Board 1994: RMB managed floating Tradable shares and non-tradable shares 1998:RMB Corporate bonds, debentures 2005-2006: State-owned commercial banks Dim sum bond panda bond listed in Shanghai and Hong Kong No book on these issues available so far 2006: Reform of non-tradable share How Do we learn about the Combine the all Chinese Characteristics? 2005: RMB back to managed floating In mid 2007, Jack sold his house in California for $0.5 2007: 5.30"stamp tax doubled million, and bough an apartment in Beijing, which 2010: Stock index futures launched cost RMB 3 million($0. 4 million equivalent, exchange 2013: T-bill Futures trading restarted rate 7 2014: Shanghai-Hong Kong Stock Connect 2015: stock market collapse from June 2015: the bank deposit rate cap removed 2015: RMBs inclusion in SDr 2016: MSCl's delay of including China's a shares in 62016/9/8 6 More About Chinese Characteristics • (Some say that none financial theory in the text book holds in China!) • Can we talk about financial markets without mentioning the economic reform? • Can we talk about the financial markets without mentioning the legal environment? • Can we understand the Chinese financial market without putting it in a global background? 0-31 The Chinese Financial System 32 • What are these in China? – PBoC,  CSRC, CIRC, CBRC, SAFE, MOF – ABC, ICBC, CBC, BOC, BoCom, AMC – Shanghai Stock Exchange, Shenzhen Stock Exchange, SME Board, GEM Board – Tradable shares and non‐tradable shares – Corporate bonds, debentures – Dim sum bond, Panda Bond • No book on these issues available so far How Do We Learn About the Chinese Characteristics? 0-33 How Do We Learn About the Chinese Characteristics? • By supplementary readings and anecdotes in the market • Do you understand why these happen, the background and the implications ? – 1992:  “5.21” soaring (growing by 105.5%) – 1994:  RMB managed floating – 1998:  RMB pegged – 2005‐2006:  State‐owned commercial banks listed in Shanghai and Hong Kong – 2006: Reform of non‐tradable shares 0-34 – 2005: RMB back to managed floating – 2007:  “5.30” stamp tax doubled – 2010:  Stock index futures launched – 2013:  T‐bill Futures trading restarted – 2014: Shanghai‐Hong Kong Stock Connect – 2015: stock market collapse from June – 2015: the bank deposit rate cap removed – 2015: RMB’s inclusion in SDR – 2016: MSCI’s delay of including China’s A shares in emerging market index How Do We Learn About the Chinese Characteristics? 0-35 Combine the All • In mid 2007, Jack sold his house in California for $0.5 million, and bough an apartment in Beijing, which cost RMB 3 million ($0.4 million equivalent, exchange rate 7.5).   0‐36