Lu Xiongwen, Dean Of School Of Management, Fudan University: An Effective Delisting Mechanism Is The Standard To Test The Success Of The Science And Technology Innovation Board

Standing at the historical node of 30 years, China's capital market has made a series of fruitful achievements: the scientific and technological innovation board has been running smoothly for more than one year, with more than 200 listed enterprises; the registration system has been extended from the science and technology innovation board to the growth enterprise market; the establishment of a normalized delisting mechanism has become the key to the construction of the capital market reform system in the next stage

How to evaluate the 30-year Reform of China's capital market, the voice of the academic community has always been an important dimension. Recently, the 21st century economic reporter conducted an exclusive interview with Professor Lu Xiongwen, Dean of the school of management of Fudan University. He interpreted the scientific and technological innovation board, demand side reform and delisting mechanism. At the same time, looking forward to the future, he put forward his own unique suggestions on the construction of Shanghai international financial center and the internationalization of China's capital market.

As one of the top professional colleges in China, Fudan University School of management has cultivated and transported a large number of talents for the listed companies and companies to be listed on the science and technology innovation board. As the president, Lu Xiongwen has a long-term and in-depth communication with enterprise managers. He has also served as an independent director and external director of a number of listed companies, financial institutions and state-owned enterprises. He has a deep understanding of the difficulties and pain points of enterprise management, and has a large number of empirical studies and profound insights into the external environment affecting the development of enterprises such as Sino US relations and Global trade, as well as the internal motivation of enterprise development such as entrepreneurship and operation management.

On science and Technology Innovation Board: delisting mechanism is the standard to test whether it is successful or not

21st century: in recent years, the government has paid more and more attention to the capital market. What do you think is reflected?

Lu Xiongwen: in the past 30 years, China has always attached great importance to the capital market. The government has never wavered in the main line of using the capital market to develop the economy and promote reform. While learning from the advanced experience of developed countries, China is constantly exploring and promoting the construction of capital market suitable for China's national conditions and different stages of China's development. We have always held high expectations for the reform of the capital market, but we always think that the reform is difficult, risky and long-term. The opening of the science and technology innovation board has won the wide recognition and support of all participants in the capital market. It is rare that the academic, financial and business circles unanimously support and affirm it. This shows that as one of the important contents of the capital market reform, the introduction of the science and technology innovation board and the registration system is very timely and effective. Under the audit system, the quality of listed enterprises can not be guaranteed, the market activity is not ideal, and the role and influence of the market are greatly reduced. In this case, we should comply with the general direction of market-oriented reform, really give the right of choice to the market, make the market play a decisive role in the allocation of resources, and improve the efficiency of resource allocation in the capital market to a greater extent.

No scientific innovation, no future. Science and technology innovation is the hope of China's future, and may also be the only hope of China's economic development. The science and technology innovation board promotes the development of science and technology innovation enterprises from top to bottom. Without the development of scientific and technological innovation, China may lose the opportunity to compete with economic powers such as the United States in this century; without a breakthrough in scientific and technological innovation, China's industrial upgrading and upgrading will not be realized, including some traditional manufacturing industries. If China does not master the core technology and is subject to the control and examination of European and American countries, even if it is under the control of other countries in terms of equipment, core materials and components Get stuck in the neck. A new round of technological revolution is coming. This industrial revolution will transform the traditional industrial chain to a greater extent. In such a situation, how to use the capital market to promote the development of scientific and technological innovation has become a national strategy. The orientation of the science and technology innovation board is to focus on those growth enterprises which are in the forefront of world science and technology and have key core technologies.

21st century: how do you evaluate the reform results of setting up the science and technology innovation board and pilot registration system?

Lu Xiongwen: this year, the enterprises listed on the science and technology innovation board have been widely recognized. Most enterprises have hard core technology, large R & D investment, and substantial progress has been made in the accumulation of achievements. Whether in the field of artificial intelligence, biomedicine, or in the field of green energy and new materials, some enterprises represent the breakthrough and leading technology of their industries. Globally, some of the technological achievements of these enterprises are groundbreaking and subversive. Over the past year, all parties in the market have taken a high look at China's science and technology innovation board, which shows that the science and technology innovation board has been very successful so far and has strongly supported the development of China's science and technology innovation.

Of course, there are also areas that need to be improved. At first, due to the standard is not very mature, some enterprises of the science and technology innovation board lack of scientific and technological innovation attributes. From now on, the internal audit and inspection of the Shanghai Stock Exchange is more and more strict, and the requirements are higher and higher. This is not only responsible for the capital market, but also responsible for science and technology innovation. In fact, some rules and standards are constantly adjusting, hoping to industrialize and commercialize the potential and original science and technology.

The capital market has also given a more objective evaluation of the listed companies on the science and technology innovation board. Although some stocks have ups and downs, they are generally rising in value. Generally speaking, the capital market gives a positive incentive to science and technology innovation. On this basis, the registration system will be extended to the gem, which is expected to be fully covered in the near future.

Whether the science and technology innovation board is really successful or not is not a simple conclusion, but should be considered from a longer time dimension. In my opinion, it will be at least three years or even five years before we can evaluate and analyze whether the science and technology innovation board has really promoted the development of China's science and technology innovation. NASDAQ in the United States is recognized as a very successful science and technology innovation board in the world. After nearly 50 years of development, it has accumulated and precipitated more than a dozen of global leading science and technology innovation enterprises with huge industrial diffusion and spillover effect. Taking this as a benchmark and reference, China's science and technology innovation board has a short time to go and still has a long way to go. If in the next five years, more than a dozen listed companies on the science and technology innovation board can change the technological and industrial features of their fields, and support the emergence of new industries and the transformation and upgrading of old industries, it will be of great significance.

Whether the scientific and technological innovation board is really successful or not depends on whether some enterprises have withdrawn from the market. A market without an effective delisting mechanism is not a healthy and mature market. I boldly predict that within five years, 10% of enterprises will withdraw from the science and technology innovation board, because the capital market is not only the choice of enterprises but also the choice of capital, so there should be the survival of the fittest. In the long run, more than one-third of the enterprises should be delisted from the market in the future, so as to prove the value of the board and prove that the market is effective and healthy.

This round of technological revolution is an ongoing process and breaks out in multiple tracks. A single innovation and breakthrough in a certain field of science and technology can form a new industry and produce several enterprises of tens or even hundreds of billions. At the same time, new technology has a strong spillover effect. When the new technology in a certain field spreads to other fields, it will quickly realize cross-border and cross-border, form polymerization and fission, and finally promote the industrial upgrading and industrial appearance remodeling in many fields. With the advent of such an era, the vitality of scientific and technological innovation will be burst, and the flow of original technologies and products in the market will be accelerated, which in turn will promote the R & D investment of scientific innovation.

21st century: after the new delisting rules come out, what suggestions do you have for retail investors?

Lu Xiongwen: the scale of retail investment should be more and more convergent. In the future, retail investors should buy more public and private fund products and give them to professional investment institutions. At the same time, we should also support more professional institutions to stabilize the market in accordance with the requirements of long-term investment. The participation of international capital is also very important. Only the participation of international capital means that China's economy and capital market have won the trust of the whole world. Of course, in the face of the entry of foreign capital, we should treat it cautiously. We should adopt different policies for long-term investment capital and short-term speculative capital. This is not only conducive to the active and development of China's capital market, but also conducive to the internationalization of RMB.

On demand side reform: channel system reform is very important

21st century: how do you view demand side reform?

Lu Xiongwen: in fact, we have not done enough on the demand side. We should encourage the development of various forms of market economy. For example, an interesting phenomenon is that many products made in China are sold cheaper in the United States than in China, because the sales channels of the same products in China are traditionally too long, and each link has to be "overgrown". Even if the online channel is developed, the competition is still not sufficient, and the e-commerce will form a monopoly, which will inevitably lead to a decline in efficiency. Sometimes the goods sold in these channels are not cheap and the search cost is high, so it is impossible to identify the authenticity of the brand.

Therefore, the demand side reform should first establish a more developed market system, first of all, the channel system. Different channels can adapt to different regions, groups and scenes. Only in this way can we adapt to the market demand, achieve more accurate matching, and more effectively stimulate the willingness to consume. Pinduoduo not only breaks the monopoly of traditional e-commerce, but also reveals that from the demand side, China is a multi-level market, and the demand potential of middle and low-level is huge, which is far from being met. Pinduoduo phenomenon is a story about the consumption upgrading of the people in the third and fourth tier cities and even in rural areas. Secondly, the social security system still needs to be strengthened and improved. The majority of the people are still worried about medical treatment, unemployment, education and other issues, and dare not spend money, resulting in low efficiency in the use of funds. Finally, the personal income tax system needs to be reformed. The income tax threshold for the middle class is too low and the progress is too fast, which greatly inhibits the consumption intention of the middle class. In any country with a mature market economy, the middle class is the most important demand and consumption force, which constitutes the foundation of the country's economic stability. If we do the above three things well, China's economy will have more stable and sustainable development.

"21st century": in 2020, the public funds burst money frequently. Some people think that this means that the market has peaked. How to understand this view?

Lu Xiongwen: it is reasonable for the capital market participants to have such concerns and views, mainly for three reasons:

First, China's capital market has a strong policy nature. For any market, too much and too deep government intervention is unreasonable and will eventually bring harm.

Second, China's capital market has strong expectations. Whether domestic or international capital markets are too hot, everyone will have a callback expectation. This is the inherent law of the market, and the market also has its obvious cycle. Therefore, when the market enthusiasm is high, even if the government does not intervene, the market will also have a correction expectation.

Third, China's capital market is immature. In China, there are more retail investors and small private placements than large institutions, so the market volatility is very strong, and the market dispersion is also very strong. Too strong dispersion and volatility means that the speculation is too strong, and too strong speculation will easily lead to sharp short-term fluctuations.

It is reasonable that these three aspects come together to form such a view. The capital market is always unpredictable. Only when people have various opinions can the market be active. Otherwise, the market can only be monotonous up or down. Generally speaking, the current capital market is relatively healthy and stable. Although there are fluctuations in some parts, it is still in a cycle.

On the system of independent directors: the promotion of independence and professionalism of independent directors

21st century: you have served as an independent director of many listed companies. There is a big controversy about the independent director system in the market. What do you think?

Lu Xiongwen: that's normal. When the independent director system was introduced into China more than ten years ago, the independent director was only arranged as a system element in the board of directors to provide some formal discussion and consultation, and did not exert influence on the company's major strategic direction choice, let alone the decision-making power.

After years of development, we have more and more realized the importance of the construction of the board of directors, hoping to give full play to the role and value of the board of directors and improve the corporate governance. This is not only the requirement of laws and regulations and government supervision, but also the internal requirement of capital market construction.

The level of governance of the board of directors today is much higher than that of more than a decade ago. The board of directors basically respects the opinions of independent directors. The external market also attaches great importance to the opinions of independent directors, which promotes the internal attention of independent directors. The market increasingly believes in the professionalism and independence of independent directors, and the market of independent directors is expanding, with rich and diverse sources and improved quality.

The independent director is no longer a title, but requires him to participate in corporate governance from the perspective of professional ability. He should not only put forward opinions and suggestions, but also put forward clear value proposition and judgment. The responsibility of independent directors of listed companies is also increasing. This is of great benefit to the development of enterprises. Of course, at the present level, the professional ability, experience and integrity of independent directors need to be further improved and improved.

21st century: you have systematically studied ESOP and ESOP in domestic and foreign enterprises. At present, ESOP is also considered as a magic weapon to stimulate employees' creativity. However, market participants are worried whether the wealth effect brought by overvaluation will dampen the enthusiasm of entrepreneurs. What's your opinion on this?

Lu Xiongwen: this problem exists all over the world, but it is not the issue of equity incentive itself. No system is perfect and effective for life, and needs continuous development and innovation. Equity incentive is a long-term institutional arrangement. From the perspective of supervision, there are strict regulations on stock selling of executives and major shareholders, which is to prevent short-term arbitrage.

In my opinion, most of the original shareholders and core technical personnel will have a strong sense of enterprise. They will not give up their pursuit because of the rise and fall of stocks and the amount of wealth. The difficulty lies in the management of general executives and technicians. They may be more eager to accumulate wealth, thus slack off their work and lose their passion.

In view of this situation, we can improve and enhance the effect of equity incentive from three aspects

First, establish a dynamic equity incentive mechanism. Equity incentive can be dynamically adjusted according to the performance of the target. Second, we should establish clear assessment standards, set up immediate incentive plan, supplemented by good welfare treatment and deferred payment of income. Third, pay attention to the construction of corporate culture. The core team's recognition of the company's management philosophy is the most important and the cornerstone of enterprise development.

21st century: how can the training program of "science and Technology Innovation Leadership Camp" newly launched by Fudan Management Institute help the development of science and technology innovation enterprises?

Lu Xiongwen: there is still a long way to go for China's economic transformation and upgrading in the future. The key lies in the success or failure of scientific and technological innovation. Many science and technology entrepreneurs do not understand management, including business model, corporate governance, ownership structure, R & D management, etc., so they have gone through many detours in the process of enterprise development.

In fact, there are many laws, principles and common methods behind the management of scientific and technological research and development. Understanding and mastering these knowledge can make enterprises more efficient and reduce risks. There are a large number of practical issues worth studying and summarizing, and then help the managers of enterprises to put forward solutions to practical problems. This is the demand for management education and research in science and technology innovation. The school of management of Fudan University should respond to and meet this demand.

Fudan University School of management has become Asia's leading and global advanced school of management. With the advent of the new scientific and technological revolution, the global management academia has not yet established a corresponding knowledge system for the management of science and technology innovation enterprises, nor a set of mature education system to cultivate talents for scientific and technological innovation enterprises. If we take a step first, we may try first and form a leading edge in the world.

Finally, the school of management is actively engaged in science and technology innovation education, which is also the performance of the college to take the national mission and the responsibility of the times. If science and technology innovation is not successful, China is likely to be controlled by others. In this sense, we have a sense of mission and responsibility. We hope that through the science and Technology Innovation Leadership Camp, we can spread new knowledge and new ideas about the management of science and technology innovation enterprises, promote the growth of science and technology innovation enterprises, and let the whole society pay attention to and support scientific and technological innovation. At the same time, we also call on the government to formulate more policies conducive to scientific and technological innovation.

On the diversification of enterprises: the need for relevant knowledge, experience and human resources

21st century: Nowadays, many listed companies in traditional industries are deeply worried about transformation, and some enterprises' cross-border mergers and acquisitions have resulted in large goodwill impairment. What suggestions do you have for these entrepreneurs?

Lu Xiongwen: this behavior is often caused by blind optimism. Behind it is the lack of understanding of the law and cycle of the whole social and economic development, and the lack of knowledge system and talent resource reserve for the development of diversified strategy. The diversified development strategy of enterprises needs to accumulate a lot of resources and experience. If they do not have the knowledge, it will be very dangerous to rush into new fields. Secondly, these enterprises lack the ability to control the new industry. To enter a new field, in fact, is to do venture capital, not only to have funds, but also to have new human resources.

The 21st century: most of the early A-share listed companies were the entrepreneurial achievements of the first generation of entrepreneurs. Now many of them have arrived at the time of handover. What are the problems in this connection?

Lu Xiongwen: the problem of the replacement of the old and the new entrepreneurs exists all over the world, especially in China. First of all, most of the first generation entrepreneurs are willing to hand over their enterprises to their own children, but some of them are not willing to take over, so the situation becomes more complicated. There are also a few creative entrepreneurs who fully respect their children's wishes, let them go to other industries, and finally let the people they trust take over. Second, the conflict between the two generations is actually behind the contradiction between the two generations. There are not only the conflicts of values, but also the differences of knowledge and experience, and the conflicts of management strategies. Third, the procedures and mechanisms of handover arrangements are also prone to problems. Some entrepreneurs of the first generation have retired in name, but they are still not at ease. They are still listening to the government from the curtain, which inevitably leads to contradictions.

From the international perspective, there are three experiences worth learning from

First, the most important thing for enterprises is cultural heritage, not property inheritance. Some Centennial enterprises inherit the enterprise values, so cultivating children should identify with the core concept of enterprise development. Second, children should be trained early. Many creative entrepreneurs have brought their children to their side since childhood. This kind of edification is not only to teach them the relevant business knowledge, but also the truth of life. The most important thing is to cultivate their sense of identity with corporate culture. Entrepreneurs can not let go of every opportunity to teach by example, because the founder is often the soul of the enterprise. First of all, children should have the opportunity to recognize and identify with the soul of the enterprise. Third, entrepreneurs should have systematic planning and design in the process of cultivating the second generation, including the choice of education path, professional choice, early career choice, and so on.

On the construction of Shanghai International Financial Center: it is necessary to have a mature and developed capital market

21st century: what role should the capital market play in the process of building Shanghai into an international financial center?

Lu Xiongwen: capital market is the foundation and core of any financial center. A city that can become an international financial center must have a developed and mature capital market. Therefore, in order to promote the construction of capital market in Shanghai, we should not only have a stock exchange market, but also a commodity futures trading market, a derivatives trading market and a variety of property rights trading markets. Otherwise, the market will be incomplete.

Facing the future, Shanghai's capital market should be open to the international market, so as to promote the internationalization of RMB. Under the epidemic situation, the pace of RMB internationalization can be appropriately accelerated, otherwise some opportunities will be lost.

The pace of RMB internationalization should not be uniform. Some window periods come, so you can run fast and take more steps. Sometimes, if the timing is not right, slow down and slow down to avoid the impact of the international market. Some countries with fragile financial systems, weak internal markets and unreasonable industrial structure will easily become "risk-taking innovation" once their financial markets are opened. China should learn from this. When international capital enters the Chinese market in the future, China should do a good job in monitoring and early warning mechanism, and have hedging mechanism to deal with short-term capital speculation.

21st century: what are the challenges of internationalization of China's capital market?

Lu Xiongwen: there are three challenges to internationalization

First, the challenges from foreign financial institutions should learn from the experience of mature developed capital markets. Second, companies from all over the world should be encouraged to list in China. Now some foreign-funded enterprises have considered listing in China. The international board is a way of saying. What's more, can we turn on the main board and allow foreign companies to list in China. What needs to be further considered is whether the market is attractive and regulatory. Third, the opening up of financial products and the internationalization of RMB should make more substantial progress, making it more convenient for capital to enter and leave.

21st century: what are your expectations and suggestions for the future development of China's capital market?

Lu Xiongwen: first of all, we should believe in the market. In the vast majority of cases, the market is effective, let the market play a role. At the same time, we should do a good job in system construction, timely supervision, ensure the effective operation of the market with laws and regulations, and effectively punish fraud and insider trading.

Second, we should be in awe of the market. The market has its own laws, so we need to follow the market rules, comply with the market cycle, and do the government's due responsibilities: to maintain the transparency, fairness and fairness of the market, and to strengthen supervision.

Third, we should effectively promote the development of the market. We have to admit that the market is not sound. For example, the registration system has not covered all sectors, and the intermediary and regulatory agencies lack experienced and high-level talents. Therefore, there is still a lot of work to be done to cultivate, develop and improve the market.

Fourth, we need to reform the regulatory system. The CSRC should not be influenced by other political forces to do a good job in registration and supervision of issuance and maintain its professionalism and independence. To respect the market, we should respect the professionalism of the regulatory agencies, separate them from the administrative system, and promote their independence and autonomy.

Finally, we should promote the internationalization of China's capital market in a forward-looking way. Under the background of accelerating global competition in science and innovation and free flow of various market elements, not only Chinese enterprises and listed companies should participate in international competition, but also China's capital market should become an international capital market, playing a role and having an impact all over the world. Only in this way can China's capital market become stronger and more competitive.