Nikko Asset Global Investment Adviser Wang Yumin: Financial Market Liberalization Needs Maturity In Many Directions.

"The change in China from Europe and the United States is like using iPhone's time-lapse photography to photograph the sunrise, or the growth of a sapling, and to evolve decades or even hundreds of years of evolution into a few minutes of video."

In December 5th, it was sponsored by the headquarters of the central broadcasting and TV station of Guangdong, Hongkong and Macau, and the southern financial and all media group. In twenty-first Century, the "China's capital market for innovation and openness", which was hosted by the twenty-first Century economic report, was pointed out by Wang Yumin, director of global investment consulting and financial fund of nixing asset.

Wang Yu Min

Wang Yumin said that when the real economy develops to a certain extent, the opening of financial market is an inevitable trend. According to past data, the domestic bond market has developed into the third largest bond market in the world in the past twenty years, taking up the important function of credit risk assessment. The immediate topic is how China's financial market will integrate into the global financial system.

In combination with Japan's experience of opening to the outside world, Wang Yumin said, "what these history tells us is that the order and echoes of market opening are very important. While opening up the financial market, we need effective supervision, mature institutional investors, stock market, bond market and foreign exchange market. These factors can not be missed, otherwise we will repeat the mistakes of Japan and Korea.

In its view, the market opening will bring many important benefits undeniable. The domestic market can learn from overseas investment experience and develop into a more mature capital market. For example, the downward trend of market valuation fluctuates and the turnover rate is downward. The stock price reflects the fundamentals, and it is more suitable for long-term investors instead of short-term speculation.

"But capital flow is like flood irrigation. Sudden outflow will lead to serious disasters. It depends on the long-term nature of the fund, the structure of investors and the investment strategy. Although Asia's most developed economies, such as Japan and South Korea, have achieved great success in manufacturing export economies, few in the financial services industry have heard of transnational corporations that are truly global brands from Japan and Korea. The financial services industry is about trust and more ideological worries. Moreover, when the rules of the game are based on the dollar standard, all lifeblood is in the hands of the financial institutions in the United States. Such an environment has created a bottleneck that Asian enterprises can not easily break through. I think that's why Asian companies are still unable to penetrate the European and American markets in the financial sector. Wang Yumin said.

"Overseas investors continue to increase their holdings of A shares is the general trend, which is bound to happen." Wang Yumin said, "the focus of the debate is how long it takes and how fast the pace is. The problem still depends on the measurement of profits and risks. From the perspective of earnings, China's stock returns have gone beyond the emerging market. It can be said that investing in emerging markets is to invest in the Chinese market first, because the Chinese economy is driving the whole emerging market economy, and the stock market is following the same track. "

Looking ahead to the financial opening of the Chinese market, Wang Yumin believes that "China's financial opening up is a marathon. If China changed from a backward agricultural country to a world factory in twenty-first Century for 30 years, we have reason to believe that China needs 30 years to build an open and developed financial market with the West."

In his view, there are two reasons. First of all, finance should be attached to and serve the real economy, otherwise it will not be established. If the development of the financial industry goes far beyond the development of manufacturing and real economy, such financial development will be more speculative, and the development results will not be strong enough. Finance is after all a service, and it will not produce anything.

Secondly, it is a long way to go to build a strong, dynamic financial market system that is not subject to the dollar centered international financial system.