Distinguished leaders and guests,
Good morning! At the beginning of this new year, on behalf of China Central Depository & Clearing Co,. Ltd., I would like to extend our warmest welcome to all the leaders, experts and media for joining us in this Bond Market Investment Strategy Forum.
The past year was of historic significance for the development of China financial market. The year 2017 witnessed the opening of the 19th CPC National Congress and the 5th Financial Work Conference and it also marked the 20th anniversary of the establishment of China Inter-Bank Bond Market. During the year, under the directions of regulatory bodies, CCDC as one of the core national financial infrastructures has been striving forward steadily, improving its capacity and sticking to its mandates, and the company has made some important progress. I would like to share with you some details.
First, improving the main business lines to help facilitate the supply-side structural reforms. In 2017, in response to the requirements of the Financial Work Conference, the company further consolidated the advantages of its main businesses, kept enhancing its integrated service capabilities, and made a full play of its functions as a direct financing platform and core operation platform of the bond market. CCDC supported the issuance of 13.58 trillion yuan of various types of bonds and concluded the settlement of over 1000 trillion yuan annually, broadly unchanged from the previous year. Bonds under custody of CCDC exceeded 50 trillion yuan, to 50.96 trillion yuan, registering a y-o-y increase of 17%. The company actively participated in the green bond market innovation and released a green bond report in cooperation with international organizations. It supported the issuance of green bonds totaling about 170 billion yuan during the year, accounting for over 80% of the market and making China maintain its position as the world's largest green bond market. The company promoted credit activation and capital saving, and supported the issuance of credit asset-backed securities of nearly 600 billion yuan, an increase of 68% over the same period of last year. It also helped the financial industry enhance the capital management by supporting the issuance of Tier II capital instruments of nearly 500 billion yuan, an increase of 87% over the same period of last year. CCDC supported the development of inclusive financial services by coordinating with the OTC institutions in products designing. It launched the publicity of savings bonds during the prime time of CCTV. It provided special services for financial institutions on the management of funds and the CMS product has won the Second Prize of Bank Technology Development. CCDC has been focusing on the IT support for the modernization of financial infrastructure. It launched the construction of new generation of systems, continuously improved its system functions, promoted the planning and construction of a new data center and laid solid foundation for its development. The company actively expanded its service lines, explored the adoption of customer manager system, sought strategic cooperation and kept refining its services.
Second, enhancing the functions to support the coordinated and effective implementation of macro-economic policies. In 2017, CCDC strengthened its role of infrastructure intermediary and perfected its function of macro-policy implementation platform. It actively coordinated the issuance innovations of government bonds such as the rolling issuance of special bonds at maturity and the add-issuance of local government bonds. The company established a strategic measurement and analysis system for government bonds, launched government bond market making support mechanism, and carried out real-time operations of government bond futures DVP settlement. It supported local government bonds innovation and promoted the development of local government bond OTC business. It facilitated the accurate implementation of monetary policy by supporting open market operations of more than 20 trillion yuan and introducing electronic operation of innovative policy tools. CCDC actively replied to the requirements of industrial policies, and supported the expansion of corporate bonds and institutional innovations. It refined the third-party technology assessment process, pushed forward the construction of corporate bond credit system, carried out nationwide roadshows of corporate bond policies, and effectively promoted the implementation of industrial policies. The company also actively perform its first-line monitoring functions, and provided multi-faceted monitoring reports to supervisory bodies. As one of its effort in strengthening organizational governance, CCDC established Statistical Monitoring Department. CCDC continued to implement the requirements of Central Leading Groups for Comprehensively Deepening Reform on monitoring of Treasury bond market. It also constructed an indicator system for bond market risk monitoring.
Third, deepening services to promote a steady and regulated development of financial market innovations. By fully exploiting the main business lines, CCDC served as an agglomeration platform for a variety of innovative elements. The company continued to innovate its core risk management services, and expanded its services to new territories such as international financial cooperation and developmental finance, while deepening its efforts in the traditional areas of collateral management. The outstanding collaterals managed by the company reached 14.59 trillion yuan, ranked the first place among all major global CSDs. In addition, in cooperation with the competent authorities, CCDC actively promote the adoption of trilateral repurchase and the central bond lending business. In an effort of further enhancing the role of benchmark yield curves, CCDC released SKY indices. The company deepened the construction of the green bond indices and supported the development of green bond index-based wealth management products. It also pushed forward the adoption of financial standards for ChinaBond Pricing Index Products and continuously improve the market influence of the products. The company has set up its headquarters in Shanghai and promoted the construction of five core functions of "Bond Cross-border Distribution Center, Cross-border Settlement Center, Collateral Center, Financial Pricing Center and Shanghai Data Center". It deepened its function of the integrated research and development platform for the bond market by promoting the construction of the featured think tank, setting up an R&D Center, improve the management of post-doctoral workstations, and continuing to promote the joint construction of the ChinaBond Institute. CCDC has continued to provide infrastructure services for financial products such as credit assets, wealth management products, trust products and government industrial funds, and contributed to the standardization, transparency and regulatory efficiency of financial markets. The outstanding depository balance of credit assets, wealth management and trust products exceeded 55 trillion yuan. The group structure of a central financial infrastructure has come into being.
Fourthly, conforming to the market requirements to promote bond market opening up in an orderly manner. As the main channel for opening up the bond market, the company made every effort to increase its international service capabilities. It vigorously promoted the bilingual capability of information services, the development of the English clients, revamping of its English website, the successful access to SWIFT international network. CCDC has conducted tax service research to facilitate the entry into China market of overseas institutions. It has strengthened the system construction, extend the settlement cycle, and rearranged its service upgrading in consistency with the HVPS requirements. It responded to the requirements of competent authorities by actively supporting the pilot operation of Bond Connect, supporting cross-border issuance, custody and settlement, promoting interoperability with international financial infrastructures, and supporting the construction of a free trade zone bond market. The company promoted mutual recognition of cross-border collateral and supported the use of collateral services in cross-border businesses of international agencies. As of the end of 2017, the number of overseas clients served by the company reached 618, an increase of 50% over the same period of last year. The amount of bond depository of overseas institutions exceeded 1 trillion yuan, up 25% over the same period of the previous year, accounting for about 90% of the market. The pattern of direct participation of overseas institutions supplemented with Bond Connect has emerged. CCDC actively promoted international exchanges, holding several overseas investor annual meetings in China and a number of overseas business promotion seminars, participated in SWIFT International Fair for the first time, and joined the International Index Industry Association as the first Chinese institution. The company was also named "Best Service Provider for Bond Market Opening up” in 2017.
Ladies and Gentlemen, the year 2018 is the first year to fully implement the spirit of the 19th CPC Congress and the financial work conference. It is also the 40th anniversary of the reform and opening up of China. The China Central Depository & Clearing Co., Ltd. will continue to conform to the deployment and requirements of the CPC Central Committee and the governing bodies, stick to it responsibilities as the core financial infrastructure, deepen its business, build on its service brand, and promote the in-depth development of the market.
First, we shall stimulate new vitality to enhance the abilities of bond market to better serve the real economy. At present, the bond market has become the main market for direct financing. As a central supporting pivot for the efficient operation of the market, CCDC plays a key part in raising the proportion of direct financing serving the real economy. In the next step, the company will continue to consolidate its main businesses, explore "one-stop" comprehensive services, strengthen market research and judgment, continuously deepen the functions of direct financing platform, promote the rapid development of the direct financing market, optimize the financing structure, and enhance the efficiency of the bond market in serving the real economy.
Second, we shall take the new missions to help the bond market enhance the ability of risk prevention. Preventing systemic risk is one of the main lines of financial work in the future, which urgently needs the deep involvement of the company. As a next step, the company will improve its internal risk management, perfect the market risk monitoring index system, continuously improve the collateral management service, enhance the data service function, launch and improve the liquidity management tools, and strengthen the brand construction of statistical monitoring, collateral and information services and other risk management products, provide systematic solutions to market risk prevention, and safeguard market stability.
Third, we shall face the new challenges and optimize the bond market to facilitate the financial reform and opening up. A new era calls for a better ability of maneuver in a wider territory. In the next step, the company will enrich the elements of its service system supporting national strategies such as the "Belt and Road" and the construction of Shanghai international financial center, speed up the implementation of the construction of the free trade zone bond market, promote the adoption of some core functions such as cross-border issuance, settlement, collateralization and pricing, and seek to enhance direct engagements with overseas infrastructure agencies. In the process of internationalization, we should make overall plans for China's national conditions and international practices, adhere to road self-confidence and institutional self-confidence, and carry out a series of measures to promote the orderly opening up and integrated development of the domestic and offshore markets, gaining new advantages in international cooperation and competition.
Guests and friends, the development of the financial market has entered a new era, which needs a well-functioning and well-established bond market to play a fundamental and innovative strategic role. All of you here are builders and experts of the market. I sincerely hope that everyone can speak freely in this forum and jointly contribute to the new development of the market. To conclude my speech, I wish this forum a complete success! And I would also like to take this opportunity to wish you all the best in the New Year with good health, smooth work and happy families. Thank you all!