Several Opinions of the State Council on Promoting the Reform, Opening Up and Steady Development of the Capital Market
Several Opinions of the State Council on Promoting the Reform, Opening Up and Steady Development of the Capital Market
Several Opinions of the State Council on Promoting the Reform, Opening Up and Steady Development of the Capital Market
Guo Fa [2004] No. 3
January 31, 2004
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, all ministries and commissions of the State Council, and all agencies under the direct control of the State Council:
Since the Circular of the State Council on Further Enhancing Macro-controls in the Securities Market (GuoFa [1992] No. 68) was distributed, China's capital market have undergone rapid growth and have seen universally acclaimed achievements. As the capital market begins to take shape, with continuous improvements in market infrastructure, the gradual development of the legal system, and further enhancements to market standardization, they have become an important component of the socialist market economy by contributing greatly to the reform and development of state-owned enterprises and the financial markets, the optimization of resource allocation and the promotion of economic restructuring and development. With a view to realizing the spirit of the 16th CPC National Congress and the 3rd Plenary Session of the 16th CPC Central Committee, and vigorously promoting the reform, opening up and steady development of capital market around the strategic goal of building a prosperous society in all respects, the following opinions are hereby announced:
Article 1 Fully Understanding the Importance of Developing the Capital Market
Developing the capital market is a task of strategic importance linked to the fulfillment of the strategic goal of quadrupling China's GDP within the first two decades of this century. First, it will facilitate improvements in the socialist market economy, bring into fuller play the role of capital market in optimizing resource allocation, and effectively turning social capital into long-term investment. Second, it will facilitate the restructuring and strategic transformation of the state-owned sector of the economy and accelerate the development of the non-state-owned sector. Third, it will facilitate an increase in the proportion of direct financing, improve the structure and efficiency of the financial markets, and maintain financial security.
China's financial markets have been developing step-by–step in line with economic restructuring. Due to a lack of coordination during the initial stage of restructuring and flaws in the design of the system, there remain within the capital market certain underlying issues and structural conflicts which have hampered the way in which market functions can be brought into effective play. These problems arise from, and therefore must be solved through, the development of the capital market. The 16th CPC National Congress has put forward the strategic goal of building a prosperous society in all respects; the 3rd Plenary Session of the 16th CPC Central Committee has adopted the Decision of the Central Committee of the Communist Party of China on Certain Issues concerning Improvements to the Socialist Market Economy, which has established plans for developing the capital market and clarified the orientation of the reform, opening up and steady development of such markets. We should, by having a correct understanding of the current situation, seizing opportunities and modifying our perspectives, vigorously develop the capital market, increase the proportion of direct financing, create and cultivate a sound investment environment, bring into full play the role of capital market in promoting capital formation, optimizing resource allocation, driving economic restructuring, improving corporate governance, etc., in an effort to make additional contributions to the sustained, coordinated and healthy development of the national economy at a rapid rate and the building of a prosperous society in all respects.
Article 2 Guidelines for and Tasks in Promoting the Reform, Opening Up and Steady Development of the Capital Market
The guidelines for promoting the reform, opening up and steady development of the capital market are: using Deng Xiaoping Theory and the important ideas of the "Three Representatives" as our guidance, fully implementing the spirit of the 16th CPC National Congress and the 3rd Plenary Session of the 16th CPC Central Committee, following the principles of openness, fairness and impartiality and the policies of the rule of law, supervision, self-discipline and standardization, upholding the service of and coordinated development with the overall national economic situation, upholding the rule of law in the regulation of markets and the protection of the legitimate rights and interests of investors, in particular individual investors, upholding the unleashing of market forces in capital market and optimizing the role of market mechanisms, maintaining the momentum of reform, the speed of development and the degree of standardization that the market can bear and appropriately handling the relationship between reform, development and stability, promoting the adoption of development-based solutions to issues that arise as we move forward and the appropriate handling of the relationship between capital market development and the prevention of market risks, and upholding the principle of progressiveness in and the continuous upgrading of our efforts to open up to the outside world.
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