At 9 a.m. on May 7, the State Information Office held a press conference, with the People's Bank of China President Pan Gongsheng, the State Administration for Financial Regulation Li Yunze, and the China Securities Regulatory Commission Chairman Wu Qing introducing the relevant situation of "a package of financial policies to support stabilizing the market and stabilizing expectations." Related statements related to the capital market have aroused high market attention and discussion.

The following are the key contents of this press conference involving the capital market:

1. A package of "combination punches" to stabilize the market from policy hedging, capital hedging, expectation hedging, etc.;
2. The central bank lowered the deposit reserve ratio by 0.5 percentage points and is expected to provide the market with a long-term liquidity of about 1 trillion yuan; starting from May 8, the open market's seven-day reverse repurchase operation interest rate was adjusted from the previous 1.50% to 1.40%;
3. The State Administration for Financial Regulation will further expand the scope of long-term investment in insurance funds and introduce more incremental funds to the market.
4. It reflects "stability" in market operation, and "progress" in stimulating market vitality and strengthening market functions;
5. Implement policies and measures to deepen the reform of the Science and Technology Innovation Board and the GEM to further enhance the inclusiveness and adaptability of the system;
6. Speed ​​up the issuance of the newly revised "Regulations on the Management of Major Asset Restructuring of Listed Companies" and relevant regulatory guidelines to better play the role of the main channel for mergers and acquisitions in the capital market;
7. Provide all-round, "relay" financial services for science and technology enterprises;
8. To promote the high-quality development of public funds, fund managers should share weal and woe with investors, develop together, and achieve mutual achievements, forming a virtuous cycle of "returns increase - capital advance - market stability";
9. Stock market stability is related to the overall economic and social situation and the vital interests of hundreds of millions of investors;
10. Fully confident, have the conditions and ability to achieve stable and healthy development of China's stock market;
11. A-share listed companies have strong resilience and adaptability;
12. Listed companies are an important part of China's economy and the cornerstone of the capital market;
13. While strengthening supervision, transmit regulatory temperature and try their best to help affected enterprises cope with the impact of the US imposing tariffs;
14. Support listed companies with greater strength to merge and reorganize, focusing on industrial logic to "strengthen the body", stimulate vitality, and improve quality;
15. Foreign-funded securities financial institutions and foreign capital have become important participants in the A-share market;
16. Adhere to respecting laws and rules, and actively create a stable, transparent and predictable regulatory environment;
17. Create conditions to support high-quality Chinese stock companies to return to the mainland and Hong Kong stock markets;
18. Four "highlights" promote the high-quality development of public funds. Highlight the strengthening of interest binding with investors; highlight the enhancement of the stability of fund investment behavior; highlight the improvement of ability to serve investors; highlight the work orientation of developing and strengthening equity funds.

Wu Qing: Make every effort to consolidate the market's steady and positive momentum

Wu Qing said at the press conference of the State Information Office that he would make every effort to consolidate the market's steady and positive momentum. Strengthen market monitoring and comprehensive risk analysis, dynamically improve work plans for responding to various external shocks, fully support the Central Huijin Company to play a good role as a "standard fund", cooperate with the People's Bank of China to improve the long-term mechanism for monetary policy tools to support the capital market, and better play the internal market stabilization function of all market participants.

Wu Qing said that measures will be further introduced to deepen the reform of the Science and Technology Innovation Board and the GEM, and enhance institutional inclusiveness and adaptability at the market level and investor protection.

Pan Gongsheng mentioned that the People's Bank of China firmly supports Huijin Company to implement increased holdings of stock market index funds when necessary, and provide them with sufficient re-lending support, resolutely maintaining the smooth operation of the capital market.

Wu Qing said that the allocation value and attractiveness of China's assets are continuing to increase.

"We will have wind and rain on the way forward, whether it is light breeze or drizzle, or storm, whether it is high and rapid wind or storm, we have the confidence and conditions and ability to achieve stable and healthy development." Wu Qing said frankly.

A-share listed companies have strong resilience and adaptability

Wu Qing mentioned that in response to the impact of the imposition of tariffs in the United States, many listed companies disclosed through announcements, performance briefings, etc. Overall, the US tariff policy has impacted the global economic and trade order, and the operations of listed companies are inevitably affected, and many companies with a high proportion of exports to the United States have a greater impact. As a representative of the important and outstanding corporate group of China's economy, A-share listed companies have strong resilience and adaptability. Super-large-scale domestic demand and potential demand are the confidence. Nearly 90% of A-share listed companies' income comes from domestic. The first quarter report shows that the net profit of listed companies increased by 3.6% simultaneously, while the net profit of listed companies in the real economy increased by 4.3%.

Wu Qing said that for listed companies that are indeed greatly affected by tariff policies, they will further enhance regulatory tolerance in terms of equity pledge, refinancing, and the use of raised funds to help alleviate difficulties.

Wu Qing revealed that since April 7, more than 350 listed companies have disclosed repurchase and increase plans, reflecting that listed companies are full of confidence in their own value and development. In the next step, the CSRC will continue to promote the function of the capital market, transmit the supervision temperature while strengthening supervision, and try its best to help affected enterprises cope with the impact of tariffs.

Wu Qing said that he supports listed companies to transform through mergers and acquisitions. At present, the China Securities Regulatory Commission is speeding up the revision of the management measures for major asset restructuring of listed companies, further improving the supporting measures for the six mergers and acquisitions, and supporting listed companies with greater strength.

Wu Qing said that we should strengthen multi-level capital market products and services, encourage domestic enterprises that meet the conditions to go public overseas in accordance with the law, and enhance the expansion ability of the global market.

"Action Plan for Promoting the High-Quality Development of Public Funds" will be released as soon as possible

Wu Qing said that the CSRC will issue the "Action Plan for Promoting the High-Quality Development of Public Funds" on the same day. He introduced that reforms focus on strengthening the interest binding between public funds and investors, and will optimize the charging model of active equity funds. Those with poor performance must charge less management fees. Through the floating management fee collection mechanism, the phenomenon of fund companies "safe to ensure income" is reversed. At the same time, indicators such as whether performance outperforms the benchmark, investor profit and loss situation, which directly affect investors' vital interests, are included in the assessment system of fund companies and fund managers, and urge fund companies to transform from "focusing on scale" to "focusing on returns".

The "Action Plan for Promoting the High-Quality Development of Public Funds" is relatively mature and will be released as soon as possible. The plan emphasizes the enhancement of the stability of fund investment behavior. In response to the problems of style drift and misalignment of goods, it is necessary to set up a clear performance benchmark for each fund as a measure of the true performance of the product to avoid deviation from the name and positioning of the product investment behavior. At the same time, establish a comprehensive incentive and constraint mechanism for the company itself, clarify that the assessment weight for more than three years shall not be less than 80%, reduce the phenomenon of fund managers chasing ups and selling downs, and improve long-term product returns.

At the same time, Wu Qing mentioned that regulations on the management of public fund investment consultants should be issued to promote standardized development.

In addition, Wu Qing said that it will strengthen cross-border regulatory cooperation between bilateral and multilateral, create a stable, transparent and predictable regulatory environment, safeguard the legitimate interests of enterprises in overseas markets, and support high-quality Chinese stocks to return to the mainland and Hong Kong markets.

Wu Qing said that the market value of A-shares held by foreign capital is stable at around 3 trillion yuan, and the China Securities Regulatory Commission will unswervingly promote high-level opening up of the capital market.

Central Bank: Reduce the deposit reserve ratio by 0.5 percentage points

Pan Gongsheng said that the deposit reserve ratio was reduced by 0.5 percentage points and it is expected to provide the market with long-term liquidity of about 1 trillion yuan. The policy interest rate was lowered by 0.1 percentage point, that is, the open market's 7-day reverse repurchase operation interest rate was reduced from the current 1.5% to 1.4%, which is expected to drive the loan market quotation rate (LPR) to decline by about 0.1 percentage point simultaneously.

The interest rate of structural monetary policy instruments was lowered by 0.25 percentage points, including: the interest rate of various special structural instruments and the interest rate of re-lending for agriculture and small businesses, both of which were reduced from the current 1.75% to 1.5%; the interest rate of mortgage supplementary loans (PSL) was reduced from the current 2.25% to 2%.

Pan Gongsheng said that the two monetary policy tools to support the capital market will be optimized, and the quota of the two instruments of 500 billion yuan of securities and funds and insurance companies will be merged, and the quota of the two instruments of 300 billion yuan of stock increase in repurchase and re-lending, and the total quota will be changed to 800 billion yuan.

Last year, the People's Bank of China, together with the China Securities Regulatory Commission, the State Administration for Financial Regulation and other departments, created two capital market support tools: swap convenience and stock repurchase increase and re-lending. Up to now, swap convenience has carried out two operations, with a total amount of 105 billion yuan; more than 500 listed companies and major shareholders have announced the use of loans to repurchase and increase their holdings, with a total loan amount of about 300 billion yuan. The two tools are embedded with countercyclical adjustment attributes, which mainly play the role of supporting the bottom.

When the capital market is significantly undervalued, securities institutions, listed companies and major shareholders will have a stronger willingness to use the low-cost funds provided by the two tools to buy stocks, blocking the negative cycle of the weakening market. For example, in November last year, around New Year's Day this year, and early April, when the U.S. abuse of tariffs brought shocks, the use of swap convenience increased significantly, and listed companies were also more enthusiastic in repurchasing and increasing holdings. The internal stability mechanism established thus plays a role in correcting capital market overshoots and stabilizing market expectations.

Li Yunze: Three major measures to support stable and active capital markets

At the press conference of the State Information Office, Li Yunze said that he would give full play to the role of insurance funds as patient capital and long-term capital, increase efforts to enter and stabilize the market, and the next step will be to introduce three measures to support the stabilization and active capital markets. First, expand the pilot scope of long-term investment in insurance funds and inject more incremental funds into the market; second, adjust the regulatory rules for solvency, further reduce the risk factor of stock investment by 10%, and encourage insurance companies to increase their efforts to enter the market; third, promote long-term assessment mechanisms and promote long-term investment.

Li Yunze said that he would approve another 60 billion yuan to further expand the pilot scope of long-term investment in insurance funds.

Li Yunze said that a total of 8 incremental policies have been introduced recently, including accelerating the introduction of a series of financing systems that are compatible with the new model of real estate development, further expanding the scope of long-term investment pilot projects for insurance funds, introducing more incremental funds to the market, adjusting and optimizing regulatory rules, reducing the risk factors for insurance companies' stock investment, and supporting a stable and active capital market.

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[Editor in charge: Qin Peijie PF207]