On the afternoon of September 14, Chen Youan, former President of China Galaxy Securities and Doctor of Management Sciences, was invited to the 79^th SUSTech Lecture to deliver a lecture titled China’s Reform of the Financial System and Challenges to It. Chen is a recipient of the Special Government Allowances of the State Council. Based on his working experience, he talked about several major problems facing China’s economy. This lecture was chaired by Vice President Wu Chuanyue.

The lecture

Prof. Chen Youan gives a lecture

Chen’s lecture started from the beginning of China’s reform and opening up in 1978. “Since then, there has been market in socialism and planning in capitalism. China’s economy underwent enormous changes. After a series of reforms, such as reform of pricing system, commodity circulation system and financial system, the deadlock of planned economy was gradually broken with an increasingly higher degree of marketization. From 1978 to 2008, the average annual growth rate of China’s economy reached 9.98%, which was unprecedented in human history.”

Then Chen gave a brief introduction to the establishment and preliminary running of China’s banks. “In 1949, our country’s economic system was very simple, with only People’s Bank of China and Ministry of Finance. There were no commercial banks but only specialized banks like China Construction Bank and Bank of Communications. In 2000, China wanted to join the WTO, but had no enough capital. So China carried out shareholding system reform and transformed wholly state-owned banks into state-controlled listed companies.”

Based on his own experience, Chen referred to the great achievements of the reform and opening up. He remarked that without the reform and opening up policy, Chinese people today couldn’t have enjoyed such a happy life.

Chen also talked about some challenges and obstacles faced by China’s economy, including financing platform, aging problem and pension insurance.

According to Chen, at present China should prioritize direct financing. “China now pays too much attention to indirect financing. Therefore, it is very urgent for China to develop capital market and direct financing. The set up of Shanghai Stock Exchange and Shenzhen Stock Exchange meant that the capital market of China was established. China’s capital market develops rapidly, with more than 2800 listed companies and New Third Board now. But as the financial system faces tighter regulation, the growth of the capital market slows down.” Chen believed that it was vital to implement a proper financial system, namely the registration-based initial public offering (IPO) system, “Current problems can only be solved by reform and development. We should ensure to implement a proper financial system and treasure talents. These are absolutely not empty words, but my direct experience from several decades of working.” Chen’s remarks were received with a big applause.

In the Q&A session, students asked questions about the economic development of Northeast China, real market markets, Fed interest rate hikes and so on, which were patiently and humorously answered by Chen Youan. After the lecture, He Jia, Director and Professor of Department of Finance, awarded Chen Youan with SUSTech Lecture Certificate for 79^th Speaker.

Source: Students Journalism Club

Text: Wang Xiaohan

Photography: Su Jiahui