[Editor’s Note]
Starting from the establishment of the Shanghai Stock Exchange, on December 19, 2020, China’s capital market has been officially established for 30 years. Over the past 30 years, China’s capital market has continued to reform, innovate, and grow, and today it has become one of the most important financial markets in the world.
At this special historical node, the news releases the topic “The Power of Market”, interviews 30 iconic figures of China’s capital market, and looks back on the development of China’s capital market in the past 30 years Major historical moments in history, looking forward to the development prospects and directions of the next 30 years.
Speaking of the establishment of the Shanghai Stock Exchange (Shanghai Stock Exchange), there is a “hidden figure” behind Zhang Ning. She was the former director of the Shanghai Securities Regulatory Bureau. Thirty years ago, she was responsible for the establishment of the core rules and regulations of the entire exchange in the main creative team preparing for the establishment of the Shanghai Stock Exchange.
At that time, she fought with the entire Shanghai Stock Exchange’s start-up team for more than 100 days and nights. When she officially opened, she retired and returned to front-line supervision. Although only a short period of more than one hundred days, for Zhang Ning, it was more than one hundred days of the most wonderful life. Now that she is retired, she is still full of passion when talking about that period.
Over the years, she has rarely appeared in the media. Now at the special time of the 30th anniversary of the capital market, News (www.thepaper.cn) invites Zhang Ning to share the glorious history of his participation and the little-known stories in his years of frontline securities supervision.
The following is a record of the interview with Zhang Ning in the news:
About preparing for the establishment of the Shanghai Stock Exchange
News: How did you get involved with the Shanghai Stock Exchange? Can you tell me the story of your participation in the preparation of the Shanghai Stock Exchange?
Zhang Ning: The preparations for the establishment of the Shanghai Stock Exchange basically began in 1989 and the early 1990s. At that time, I was the chief of the marketing section in the Financial Administration Department of the People’s Bank of China. At that time, Wei Wenyuan (the first director of the Shanghai Stock Exchange) The general manager) is the deputy director of our financial management office. One day he approached me and told me that the Shanghai Stock Exchange would be established, This is a major event in China’s capital market, are you willing to participate?
I said yes. At that time, I felt that I was fortunate to be able to participate in such a preparatory work. It was indeed a very good opportunity for me.
We divide the work with Wei Wenyuan. He takes care of the outside and I take care of the inside, which is the establishment of some rules and regulations of the exchange. Because I have been in the securities market management for 5 years before that, and I have also written some regulations. When I was at Fudan University in 1985, I co-wrote a paper with others about the establishment of a stock exchange in my country at this stage. In 1988, the Financial Management Office of the People’s Bank of China also sent me to Hong Kong to study financial markets, so I have some theoretical reserves. And market supervision experience.
News: What did you know about the background of the establishment of the Shanghai Stock Exchange?
Zhang Ning: The establishment of the stock exchange coincides with the development and opening of Pudong. I remember that in December 1989, Zhu Rongji, secretary of the Shanghai Municipal Party Committee and Mayor at the time, presided over the meeting of the Standing Committee of the Municipal Party Committee. The meeting discussed two issues. One was the introduction of foreign banks and the second was the preparation for the establishment of the Shanghai Stock Exchange.
The Standing Committee established a three-person team to prepare for the establishment of the exchange. One of the panelists was Li Xiangrui, the chairman, president and party secretary of the Bank of Communications at the time. He had a sentence that impressed me. He said that the establishment of a stock exchange at this stage has more political significance than economic significance, and long-term benefits are greater than immediate benefits. , The social benefit is greater than the economic benefit.
I had a question at the time, why is the political significance greater than the economic significance? Later, after one incident, I understood the deep meaning of this sentence.
On April 18, 1990, the State Council announced the development and opening of Pudong in Shanghai; on April 30, the Shanghai Municipal Government announced the ten major policies and measures for the development and opening of Pudong. One of them is the establishment of the Shanghai Stock Exchange.
In May of that year, the Shanghai Foreign Investment Commission, the Shanghai Branch of the People’s Bank of China, and the Beijing Joint Office jointly held an international seminar on the securities market in Shanghai. The International Symposium was held for three days and invited experts from the world to participate.
I was at the meeting site that day,The Shanghai Stock Exchange was about to announce the establishment of the Shanghai Stock Exchange. I remember that at the moment when the announcement was completed, there was a “boom” in the audience, which made me very strange. When the meeting was over, I saw a foreigner, who was a representative of Morgan Stanley, and asked him why you “boomed” just now. He was full of excitement and told me Zhang Ning, do you know that for us Westerners, the stock exchange is the highest organizational form of the capitalist market. You China has to build an exchange, which shows that China is still reforming and opening up.
On December 19th, at the official opening ceremony of our Shanghai Stock Exchange, Zhu Rongji gave a speech at that time. He believed that the exchange was very significant and expressed Three meanings.
First, the establishment of the stock exchange is an important measure for China to continue reform and opening up; second, it is also an important measure to implement the central government’s development and opening up of Shanghai Pudong; third, This is reflected in our development in Shanghai, where we attach importance to finance.
These three meanings, combined with what Li Xiangrui said earlier, and the attitude of foreigners, we can fully understand why political significance is greater than economic significance. The establishment of the Shanghai Stock Exchange represents our image of China’s reform and opening up, and is also a product of our Pudong development and opening up.
News: At that time, you were mainly responsible for the establishment of rules and regulations within the exchange. Can you talk about it in detail?
Zhang Ning: At the exchange, I was mainly responsible for drafting several important documents. One was the Shanghai Stock Exchange’s articles of association and the Shanghai Stock Exchange’s membership management measures. At the same time, the exchange’s trading market business rules were also I’m taking the lead in discussing the formulation.
There are a few short stories. For example, when writing the articles of association of the Shanghai Stock Exchange, I wrote that our exchange “does not aim at profit.”
At that time, everyone attacked this statement and thought This is too sloppy, or just write “not profitable”, why write “not for profit”? In fact, this is something I have considered repeatedly. The so-called non-profit-making purpose and non-profitability are two different things. Non-profitability means that your organization cannot be profitable, but non-profit-making purposes does not exclude profit.
I also wrote in the articles of association that we are a membership organization. At that time, there were two kinds of transactions in the world, one was the membership system and the other was the company system. Of course, it has become absolutely extinct today.Most are company systems. At that time, I thought we should still focus on the membership system, because we are a socialist country. If we build a company system, we must make a profit, because the purpose of the company is to make a profit.
But I also considered what to do if it is really unprofitable, so I added a “business unit” qualitative, if the business unit really has no money, The state will allocate funds, which can ensure the operation of the exchange.
If you think about it, there were few stocks in the exchange at the time. Shanghai had only 7 stocks at the beginning. So from the perspective of market and economy, the exchange was established Not cost-effective.
When formulating these rules and regulations, it is more difficult to determine the business rules and trading methods of the trading market. This is a real problem.
There is no precedent to follow. We first found Shanghai’s trading rules in 1936, but more than half a century has passed. Can it still be used if you think about it? I was worried.
Later, I found Hong Kong’s trading rules, but at that time Hong Kong was a colony, and the laws and regulations were mainly in English. The translation into Chinese may not be accurate and standard, so I gave up Up.
Fortunately, a Taiwanese brokerage gave us a copy of Taiwan’s exchange market rules. When we saw it, it was similar to the old Shanghai’s, so we integrated Taiwan. Study with the old Shanghai version, discard some inapplicable, plus what we feel necessary, and turn it into our own.
I remember that there was a short-selling mechanism in the Taiwanese version at that time, but we have seen a very old movie “Midnight”, in which there is a story about short-selling This resulted in a fatal accident, so we removed the short-sale part. At that time, everyone had a very unified opinion. The rest is very noisy.
Another twist is that the core of the market approach is to trade, so what is the method of trading? At that time we discussed four.
One is from the old Shanghai, writing on the blackboard, the other is from the New York Stock Exchange, where orders are placed at the counter, the other is from Japan, with gestures, and the other is In Hong Kong, use a computer. After discussion, we felt that writing on the blackboard was too backward and decided not to.
What method should I use? When we are not sure, luckilyA person appeared at a loss. He was a teacher at the Shanghai University of Finance and Economics at the time, named Xie Wei. This person later became the vice president of the Shanghai Stock Exchange and the chief technology officer of the Shanghai Stock Exchange.
He pulled me at the time and said, “Let’s use a computer for trading. I said, how do I do computer trading?” He said so, you tell me, what is the principle of your stock trading, I will write a software. I said “It’s that simple?” He was right. After all, few people knew computers in the early 1990s.
Later I told him that the principle is first price first, second time first, and third bulk first. In this way, he really wrote the software a few weeks later. The computer that we used on the exchange to automatically match transactions, a few years later I learned that we were almost the most advanced in Asia at that time. Because Hong Kong is not a real computerized transaction, it is an on-site computerized quotation system, not an automatic matching system.
The so-called quotation system is a computer and two telephones in front of each trader, one telephone is used outside the exchange, and the other is inside the exchange. Which securities company wants When accepting a client’s entrustment to sell stocks, a call is made to the floor trader. After receiving the call, the floor trader enters the information such as what stocks to sell, how many shares and the price and other information that the broker said to sell into the computer, and then other traders on the floor Seeing this information, I felt that my client wanted to buy it, so he used another phone to call outside, and the price was negotiated between the two parties and then entered into the computer for the transaction.
The automatic matching system is where all people place an order and report it to the floor trader. The floor trader enters the computer, and the computer automatically prioritizes price and time With the principle of public priority, automatic matching transactions.
So if there was no such person as Xie Wei, we would not be able to automatically match transactions with a few of us who did not understand computers.
About 1992, we achieved paperless settlement and settlement, which was also the earliest in the world.
News: You were also responsible for drafting the Shanghai Securities Exchange Management Measures, right? Can you recall it?
Zhang Ning: This goes back to the establishment of the stock exchange. Mayor Zhu Rongji proposed at a meeting of the municipal government that the establishment of a stock exchange must be compliant and legal. First, there must be laws and regulations as the basis for establishing a stock exchange. secondThe establishment must be legal and must be reported to the State Council for approval. Both of these things eventually fell on my head.
Actually, the Securities Trading Management Measures were drafted in 1988. After Zhu Rongji’s request, I added two chapters: Stock Exchange and Securities Industry Association, and then this The measures were issued by the mayor’s order and became the legal basis for the establishment of the Shanghai Stock Exchange.
I took a document issued by the municipal government and went to Beijing by plane. It was the first time I took a plane in my life. When I arrived in Beijing, I went to the Financial Management Division first. I went to the General Office of the People’s Bank of China and waited for the president to sign and issue the documents to the State Council. After only one night in Beijing, all the procedures were completed. Even the people at the People’s Bank of China said that documents have never been processed so quickly, from the bottom of the handling staff to the president of the bank, all signed, completed in one day, and went home immediately.
On November 14, 1990, the State Council authorized the People’s Bank of the People’s Bank of China to “Approval for the Establishment of the Shanghai Stock Exchange.” The exchange’s first general meeting was held from November 24 to 26. The members jointly initiated the resolution to establish the stock exchange. They also discussed the exchange’s articles of association, member management measures, trading rules, election of directors and supervisors, and how members charge fees. . Then a press conference was held on the 26th to announce the establishment of the Shanghai Stock Exchange.
All members of the Exchange participated in the first general meeting of the Exchange, with a total of 25 companies. Some are Shanghai securities companies, such as Shenyin Wanguo and Haitong, and some are trust and investment companies. At that time, our securities companies were established relatively late, and they were all trusts at the beginning. Therefore, trust and investment companies of various banks are basically our members. There are also five urban credit cooperatives, they were acting as securities agents at the time, and they also joined as members. There are also 9 members from other places.
There is an episode in which the Shanghai Stock Exchange stated in the documents reported by the People’s Bank of China to the State Council is a local exchange and can only absorb local members, but many members from other regions All want to come in.
The president of the Shanghai branch of the People’s Bank of China asked me what I think about this matter, and I told the president that the exchange is going to be nationwide. I went to the CEOs of Zhejiang Securities and Zhongnong Trust at that time. They stated to the president on the spot that we must come in. The president finally agreed, saying that if you want to let them in, I am responsible for anything.
So I tried to find a way, because at that time the institutions were also under our control. I know that all the business departments of securities companies for external operations must have financial operations approved by the People’s Bank of China.Business license.
I will let these foreign companies set up a business department in Shanghai. They don’t need to approve a business license from the People’s Bank of China if they don’t do business. Use this legal person as a member of the Shanghai Stock Exchange.
In this way, we become a nationwide institution, and therefore we can form a unified stock price across the country, which becomes a unified national market.
This is also something I feel very fulfilling. It is a step-by-step advancement of reforms based on our wisdom.
News: Why did you leave the exchange afterwards?
Zhang Ning: When the preparations for the exchange were almost over, the leader found me in mid-November and said that Zhang Ning, you and Wei Wenyuan, can’t both go to the exchange. One goes to the exchange and the other comes back. I’m going back. Then I went back to the People’s Bank of China in December and became the Deputy Director of the Financial Management Division.
The experience of preparing for the establishment of the exchange is the most proud experience in my life, and the highlight of my life.
The timetable for the establishment of the exchange was inverted. Because Mayor Zhu Rongji went to foreign countries for inspection in June, the last stop he went to Hong Kong, he announced in Hong Kong that our Shanghai Stock Exchange was established on December 19 and invited everyone to be guests, so our preparatory work started from 12. On the 19th, go forward.
For more than a hundred days and nights, it is equivalent to mobilizing all your energy and all your wisdom, and using you to the fullest is this feeling.
When I left, I was still a little bit lost, as if the child I raised was born but has nothing to do with me.
About securities regulation
News: After the Shanghai Stock Exchange, you have worked in the posts of Shanghai Securities Regulatory Bureau and Shanghai Inspection Bureau for more than nine years. During these nine years, you have handled major issues such as share-trading reform and listed company governance. event. First I would like to ask you to talk about the shareholding