CSRC Vice Chairman Fang Xinghai Departs, Advocate of Capital Market Opening Retires (AI Translation)

证监会副主席方星海到站 资本市场开放的代言人退任

Fang Xinghai, the Vice Chairman of the China Securities Regulatory Commission (CSRC), retired at age 60 following the 20th Third Plenary Session on July 30, 2024. He was succeeded by Li Ming and relieved of his roles by the State Council and the Central Organization Department [para. 1]. Fang was known for his wide-ranging expertise, international outlook, and advocacy for opening China's capital markets [para. 2].

Fang’s academic background includes undergraduate studies at Tsinghua University and a master's and PhD from Stanford. He worked at the World Bank for five years before returning to China in 1998, where he held various roles in major financial institutions and government entities before rejoining the CSRC in 2015 [para. 3][para. 4]. Fang took over significant responsibilities previously managed by Yao Gang, who was convicted of corruption in 2018 [para. 5].

One of Fang's notable achievements was overseeing the CSRC's International Department, significantly advancing China's capital markets' global integration. In 2022, China and the U.S. signed an audit regulatory cooperation agreement, marking a milestone in cross-border audit regulation [para. 6][para. 7]. Fang also promoted initiatives such as introducing major futures products to overseas investors and expanding the scope of foreign investment in China's markets [para. 8][para. 9].

Fang was known for annual meetings with foreign institutional executives and a direct communication style [para. 10]. Upon his retirement, Vice Chairman Wang Jianjun temporarily took over Fang's responsibilities from the International Department [para. 11].

Fang's early life began in Yueqing, Zhejiang province, where his dedication to studies reflected in his efforts to learn English by memorizing an entire English-Chinese dictionary [para. 12]. He studied under Nobel laureate Joseph Stiglitz at Stanford, after which he joined the World Bank through the Young Professionals Program, working on macroeconomic policies for countries such as India and Indonesia [para. 13][para. 14].

Fang's return to China in 1998 led to his involvement in China's financial sector reform, facilitating major tasks at China Construction Bank (CCB) like non-performing asset management. Later, he joined China Galaxy Securities, Shanghai Stock Exchange, and eventually the Shanghai Financial Services Office, where he played a key role in establishing Shanghai as an international financial center [para. 15][para. 16].

He later worked at the Central Financial and Economic Affairs Commission, contributing to macroeconomic analysis and policy development. Fang took on roles in promoting financial liberalization, particularly focusing on the Shanghai Free Trade Zone [para. 17][para. 18].

In 2015, Fang returned as Vice Chairman of the CSRC, leading departments and implementing significant financial reforms. His tenure saw pivotal actions like the Sino-U.S. cross-border audit regulatory cooperation agreement and enhancements in the private equity market [para. 19].

In securing the cross-border audit agreement, Fang negotiated with the U.S. Public Company Accounting Oversight Board (PCAOB) over several years. This culminated in the 2022 agreement allowing PCAOB's inspection of Chinese audit firms, alleviating the risk of delisting for many Chinese companies from U.S. exchanges [para. 20][para. 21][para. 22][para. 23].

Fang also supported systematic openness, leading initiatives like the inclusion of A-shares in international indices and the Shanghai-London Stock Connect launch. He facilitated cross-border ETF products and broadened futures market access for foreign investors [para. 24][para. 25][para. 26]. By lifting foreign ownership restrictions in various financial industries in 2020, Fang oversaw a more accessible market environment for foreign enterprises [para. 27][para. 28].

In the futures market, Fang endorsed opening the domestic market to foreign participants, emphasizing the strategic importance of global commodity pricing. The first commodity option and crude oil futures listing marked significant milestones under his leadership [para. 29][para. 30].

Fang was an influential figure, promoting openness and regulatory cooperation on global platforms like the Davos Forum. His tenure was marked by fostering a predictable international regulatory environment and advancing China's capital market reforms [para. 31]. His retirement raises questions about the future trajectory of China's continuing efforts in financial market openness [para. 32].