In the interview with 21st Century Business Herald, Professor Lu Xiongwen, Dean of Fudan University School of Management shared his in-depth analysis on the Sci-Tech Innovation Board, the demand-side reform, and the internationalization of China's capital market.
Under the current circumstance where a new round of technological revolution is shaking the entire traditional industrial chain, empowering the development of science and technology by levering the capital market has become a national strategy. The Sci-tech Innovation Board has been a strong driving force for the development of China's science and technology industry. However, Professor Lu pointed out that, one essential touchstone for the Sci-tech Innovation Board is whether some companies will delist in future. “A market without an effective delisting mechanism can’t possibly be healthy,” he observed.
Professor Lu also gave some advice on the demand-side reform. In order to stimulate consumption and realize a more sustainable economic growth, improvements must be made in the domestic distribution channel system, the social security system, as well as the personal income tax system.
Regarding the negative effect brought about by employee stock ownership in sci-tech companies, Professor Lu offered three suggestions for managers: build a dynamic equity incentive model; establish clear assessment standards and reward plans, supplemented by competitive employee benefits; and create a solid corporate culture.
Professor Lu also shared his expectations for the future development of China’s capital market. He suggested that we should believe in the market, meanwhile spare no efforts in system construction and timely supervision, and use laws and regulations to ensure the effective operation of the market. He pointed out in the future, China's capital market must open up to the international market so as to effectively promote the internationalization of the RMB.
