Foreign Exchange Trading Center Huo Yingli: The opening of the bond market will continue to expand to the derivatives market

In recent years, our country has steadily expanded the opening up of financial marekt, and further optimized and improved the cross-border investment and financing system and interconnection mechanism, especially in the bond market. Since the launch of Bond Connect "Northbound Connect" in July 2017, the transactions reached by foreign investors through Bond Connect "Northbound Connect" have grown rapidly, and now account for about 60% of all foreign investor bond transactions.

Huo Yingli, Secretary of the Party Committee of China Foreign Exchange Trading Center, said at the 4th Bund Financial Summit on the 9th that the factors that determine foreign investors to invest in our country's bond market are multi-dimensional, and the yield difference between China and the United States is not the main influencing factor.

Based on this, Huo Yingli said that the high-quality development of Shanghai International Financial Center urgently needs to be fully transformed into institutional opening, and steadily expand the opening up of rules, regulations, management, standards and other systems in the market field. Adhere to the system concept, strengthen the connection with international common rules, overall planning and overall formation of an open, transparent and predictable market opening policy and institutional framework, and constantly improve the open ecology of marketization, rule of law and internationalization.

Among them, "Focusing on the construction of a unified market, Shanghai should comprehensively enhance its service level and global competitiveness, not only adhere to high-level opening up to the outside world, but also strive to promote the interconnection of financial factor markets internally." Huo Yingli emphasized that a complete financial marekt and financial infrastructure system are important advantages of Shanghai International Financial Center. Further consolidating and upgrading the financial marekt and financial infrastructure level is an important breakthrough point to continuously enhance the core competitiveness of Shanghai International Financial Center.

As for how to take advantage of the clustering of Shanghai's financial factor markets to enhance international competitiveness, Huo Yingli suggested that on the one hand, we should continue to promote the interconnection of domestic and overseas markets, and on the other hand, we should also strive to promote the interconnection of domestic factor markets.

More specifically, in terms of China Unicom, she believes that it is necessary to continuously increase the intensity of market opening, expand the market trading base and investment products. In July this year, on the basis of the "Bond Connect" opening of north-south two-way trading, launched a cross-border bond subscription business for foreign investors, realized the whole process of cross-border subscription electronically, and expanded the opening of the bond market from the secondary market to the primary market. In the future, with the opening of "Swap Connect", it will continue to expand to the derivatives market.

In terms of internal connectivity, Huo Yingli said that it is necessary to continuously strengthen the connectivity cooperation between our country's financial marekt and financial infrastructure, smooth the flow of market elements and resources, and better play the decisive role of the market in resource allocation. "At present, we are promoting the interconnection of the interbank bond market and the exchange bond market according to the principle of'one set of institutional rules, one bond market '," she said.

The interbank bond market and the exchange bond market have their own obvious characteristics, which are a vivid portrayal of the construction of multi-level capital markets in our country. The interbank market has more wholesale market characteristics and reflects the function of the money market. At present, the average daily transaction of the interbank RMB market exceeds 7 trillion yuan, of which repurchase transactions account for 75%. The interbank market has high liquidity of interest rate bonds and has significant advantages. In comparison, the exchange market is close to listed companies, and the liquidity of corporate credit bonds is high.

"The interconnection of the two markets is conducive to achieving complementary advantages and coordinated development, promoting the continuous improvement of multi-level capital markets, and enhancing the efficiency of bond markets serving the real economy." Huo Yingli said that in accordance with the requirements of accelerating the construction of a unified market, it will continue to expand international and domestic market connectivity, give better play to the synergy effect, effectively achieve complementary advantages, promote the smooth flow of factors and the efficient allocation of resources, provide more convenient, more efficient and more resilient capital supply and financial services for high-quality economic development, and help enhance the global competitiveness of Shanghai International Financial Center.

It should also be noted that with the advancement of science and technology, big data, cloud computing, artificial intelligence, etc. are widely used in financial marekt, which is reshaping the structure and trading mechanism of financial marekt, and deriving more demand and services. The application of financial technology has improved the efficiency of price discovery, helped improve market liquidity, and expanded the depth and breadth of financial marekt. Huo Yingli said that it is necessary to further promote the development driven by technological innovation and escort the efficient and safe operation of financial marekt.

It is understood that the foreign exchange trading center's domestic and foreign currency trading system, after many upgrades, has now achieved independent control of core technologies and independent design of system architecture. In the future, we will adhere to science and technology leadership and innovation-driven, continue to deepen the research and application of advanced technologies, strengthen key core technologies, accelerate the construction of green and high-availability data centers, and promote the layout of efficient computing power systems; fully tap the potential of data elements, improve the data security management system, and continuously improve the digital and intelligent level of infrastructure.