CCTV News: On January 22, six departments issued plans for medium- and long-term funds to enter the market; on January 23, the State Information Office introduced the promotion of medium- and long-term funds to enter the market. The medium- and long-term funds that have been promoted to enter the market this time include commercial insurance funds, national social security funds, basic pension insurance funds, enterprise (vocational) annuity funds, public funds, etc., most of which are closely related to the people. Medium- and long-term funds have finally been put into the market. What role can the implementation of this system play? "News 1+1" this episode connects Li Yimei, general manager of Huaxia Fund Management Co., Ltd., and Liu Qiao, dean of Guanghua School of Management, Peking University, to bring analysis and interpretation.

30% of the annual additional premiums are used to invest in A-shares

What problems can be solved?

Li Yimei, general manager of Huaxia Fund Management Co., Ltd., introduced that insurance funds themselves are very important components of long-term funds because they are stable and have a relatively long repayment cycle. But in reality, although the upper limit of insurance companies' investment equity can reach 25%, of our approximately 32 trillion insurance funds, there is actually only 3.2 trillion yuan, and about 10% is invested in the entire equity market, so there is still room for further improvement in this proportion. This time, when we cleared this bottleneck, we still have a more rigid requirement for the entry of new funds into the market, which is 30%, which has greatly changed the enthusiasm and proportion of insurance funds entering the market.

Why should we refine and improve the requirements of the long-term assessment mechanism?

Li Yimei said that the core of medium- and long-term funds is how long the assessment cycle is, which determines whether it is medium- and long-term funds. If we look at investment from a one-year perspective, we are relatively short-sighted in all aspects of investment transactions. If the assessment cycle is extended to three to five years, we can look at asset allocation and investment decisions from a longer perspective and cycle. This is not only helpful for the availability of long-term returns, but also for the support of the real economy, but also for the benign interaction with listed companies.

Implementation plan to promote medium- and long-term funds into the market

What kind of good market ecology is needed?

Liu Qiao, dean of the Guanghua School of Management of Peking University, said that the first thing is to have good assets. On the asset side, the quality and investment value of our listed companies should be steadily improved. In the past year, China's capital market has introduced a series of policy measures, such as market value management guidelines, which encourage dividends and repurchases, which greatly improve the quality, investment value and investability of the entire A-share listed company. This is an important prerequisite for allowing long-term funds to enter the market and retain them.

Secondly, we need to constantly innovate and continuously launch some products and tools suitable for medium- and long-term investment, such as the various index funds we have talked about now.

The third is to allow institutions to participate in the work of enterprise private placement. At the same time, in September last year, the central bank introduced some re-lending policy measures for swap convenience and stock repurchase increase, which fully utilizes this aspect and can also attract more medium- and long-term funds to play a better role.

Implementation plan to promote medium- and long-term funds into the market

What changes will it bring to the A-share market?

Liu Qiao said that the biggest change is that in the short term, it is to increase liquidity. In terms of volume and scale, the size of the medium and long-term funds we are discussing may increase the scale and liquidity of hundreds of billions of funds each year in the next few years. The entry of medium- and long-term funds into the market is actually more important and longer-term change. It is to change the structure of investors in the Chinese capital market and gradually change from a market dominated by individual investors to an investor structure led by institutions. This is a relatively ideal investment structure for the future stable development of China's capital market.

In this way, it may eventually increase the inherent stability of the entire Chinese capital market, improve the pricing efficiency and resource allocation efficiency of the capital market, and ultimately bring more investment returns to investors and increase residents' disposable income. These are some changes that we want to see in the future.