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Home > Ambassador Liu > Remarks > 2012
Speech by H. E. Ambassador Liu Xiaoming at the China Capital Market Day
2012/04/21

Dr. Chris Gibson-Smith,

Mr. Xavier Rolet,

Madame Susan Li,

Ladies and Gentlemen,

I am delighted to speak at the China Capital Market Day. I congratulate the London Stock Exchange and CICC for sponsoring this important event.

The City of London plays a vital role at the heart of global financial markets. This 'square mile' is increasingly of vital strategic interest for Chinese businesses.

In turn The LSE has a long and distinguished role as a core component of the world's leading financial centre. It offers a springboard for Chinese companies to reach the UK and Europe. More than 50 Chinese companies are trading on its markets.

This is my third time here. I first came to the LSE one and a half years ago for the 'CICC Night'. That event was to celebrate the 15th anniversary of CICC and opening of CICC UK.

CICC is China's first joint-venture international financial institution providing investment banking services. It has both profound knowledge of the Chinese financial sector and deep understanding of international markets.

I am glad that CICC is expanding its business in the UK and Europe. It is building closer cooperation with British and European investors.

Today's topic is China Capital Market. Our discussions will focus on the emerging trends in China's macro economy, commodity markets, merger and acquisition and corporate governance.

My message to you today is that China's capital market has a strong foundation and a broad prospect. I will give you the following reasons.

The first reason is steady growth of the Chinese economy. This provides a strong support for the growth of China's capital market.

Recently there has been much talk in Western media about the 'coming hard landing of the Chinese economy'. Some people seem to believe that a drastic slow-down in growth in China is unavoidable.

But a sober and informed assessment points to a rather different conclusion. Chinese growth rates have been adjusted downwards this year. This reflects a moderation of Chinese economic growth rates.

This adjustment reflects changes in global economic conditions. The changed growth rates are also the intended outcome of the government's macro economic policy. It is aimed to make China's growth more sustainable.

Let me give you another way of looking at the Chinese economy. We can compare the Chinese economy in the past 30 years to a car running on road. The shift of growth model that we want is like driving through a bend. A good driver knows that he must slow down in a bend for safety.

I also want to remind you that China's GDP in the 12th five-year plan period is expected to grow at an annual rate of 7%. Though slightly slowing down, the Chinese economy will remain a global leader and driver for growth.

My second reason is the adjustment of industrial structure in China. This change will bring great opportunities for the capital market. Structural reform will be the main theme for the Chinese economy. It includes several aspects.

l Shifting away from labour intensive industries to those driven by technology and knowledge.

l More merger and restructuring to raise efficiency.

l Improving redistribution of industries from urban to rural areas and among different regions to promote balance in the industrial structure.

In summary, the transformation of China's growth pattern will open a window of opportunity for the growth of capital markets. Given these opportunities it should not be a surprise if more Chinese companies want to break new ground in the capital markets.

Let me turn to my third reason for suggesting that China's capital market has a strong foundation and a broad prospect. During the 12th five-year plan period, China will make great efforts to reform its capital market. We have set out the following goals in this regard:

l Develop a deep and multi-tiered capital market

l Diversify investment and financing tools

l Foster a varied and vibrant community of investors

l Ensure integrity of the capital markets

Working towards these goals, I am sure China's capital market will provide better services for investors from home and abroad.

Investment cooperation is a two-way process. In recent years, Chinese companies have made huge efforts to go global. As a result, Chinese investment in the UK is growing fast. There have been a number of successful cases in sectors such as oil and petrochemicals, car manufacturing and infrastructure.

Last year was a record year. Chinese investment in the UK in one year was at a level of the total of previous decades. I am confident it will further grow at an impressive speed.

In conclusion, I wish the China Capital Market Day a great success.

Thank you!

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