Nomura Ruka: Four measures are needed to increase the securitization rate of assets in China. Renminbi internationalization and corporate globalization are key paths.

At the media sharing session of the 2025 Nomura China Investment Annual Conference held recently, Nomura China's Chief Economist Lu Ting expressed his insights on how to increase China's securitization rate. Currently, the total market value of China's stock market accounts for about 80% of GDP, far below the level of the U.S. stock market, which is twice the GDP. There is a lot of room for growth, and Lu Ting believes that increasing China's securitization rate requires a systematic solution. Lu Ting first analyzed the core pillars of the highly developed U.S. stock market: the special status of the U.S. dollar as the world's reserve currency, global leadership in research and innovation, and a group of truly multinational enterprises. He specifically pointed out that the "Seven Sisters" of American technology companies support a significant portion of the stock market, with about one-third to half of their revenue coming from overseas, giving the U.S. stock market a "global stock market" characteristic. Based on this analysis, Lu Ting prescribed four "medicines" for China to increase its securitization rate. The first is to steadily promote the internationalization of the renminbi, making China a truly global trade and financial center. Secondly, efforts should be made to cultivate the global operational capabilities of Chinese enterprises, pushing more companies to become true multinational corporations like Huawei and gain global market share. "From becoming the world's largest economy to establishing the dominance of the U.S. dollar, the U.S. took nearly half a century," Lu Ting reminds, "We need patience, this is a gradual process". In addition, he emphasized the importance of improving investor protection mechanisms and enhancing the effectiveness of industrial policies. These measures collectively constitute a systematic engineering to increase China's securitization rate, aiming to better serve the economic functions of providing for retirement and promoting consumption in the stock market, and to support China's high-quality economic development. Lu Ting concluded that only through multifaceted long-term efforts can China steadily increase its securitization rate, allowing the capital market to play a more important role in the country's economic landscape.