Financial market reform is to develop a multi-level capital market, steadily promote market-oriented reform of interest rates and exchange rates, and gradually realize the convertibility of RMB capital accounts.

In 2013, China’s financial reform was carried out quietly.

It is mainly reflected in three aspects: tripling the scale of the pilot program that allows investors to short stocks; taking measures to support local government bonds issuance; hinting at allowing more private capital to enter the banking sector; and slightly relaxing the strictly controlled capital account.

The moves show that China's new leadership is working to build a more stable financial system.

1. Short-selling mechanism China Securities Finance Corporation announced that starting from Wednesday, September 18, 2013, it will expand the pilot scope of the securities refinancing business. The number of pilot securities companies will increase from the original 11 to 30, and the number of underlying securities will increase from the original 87.

The number of stocks increased to 287 stocks.

It is estimated that the total market value of these 287 stocks is equivalent to 2/3 of the total market value of the Chinese stock market.

The industry believes that this will meet market development needs and investors’ investment needs.

2. Private banks In the banking sector, official information suggests that the Chinese government will expand channels for private capital to enter the banking sector.

In addition, the move by non-financial institutions to enter the banking industry has also caused quite a stir.

Zhou Xiaochuan, governor of the People's Bank of China, wrote in the official media Qiushi that China will give private companies more space to build banks.

Two days before Zhou Xiaochuan published this article, China's two major Internet giants, Alibaba and Tencent, both submitted applications for bank licenses.

Suning Appliance has also said it wants to set up a bank.

3. Municipal Bonds On September 16, the Academy of Social Sciences and China Bond Rating signed a cooperation framework agreement on China’s local government rating in Beijing, and publicly released the preliminary cooperation research results for the first time.

Among them, ChinaBond Rating also released local government entity rating methods and models, which will provide prerequisites for local governments to issue municipal bonds.

Chinese local governments are not yet allowed to directly issue municipal bonds.

However, the actual situation is that local governments have actually borrowed a large amount of government debt through financing platforms or other means.

In addition, the Chinese government has given the green light to global hedge funds to raise funds in China.

The six selected hedge funds were each allowed to raise US$500 million in China.

Although this scale is small, it is an important step in China's liberalization of capital controls.