The 7th Congress of Appraisers, jointly hosted by the China Association of Asset Appraisers and the World Federation of Valuers’ Organizations, is an annual gathering for the global appraisal industry. It serves as both a platform for showcasing appraisal achievements and for peer-to-peer exchanges within the profession, as well as a bridge for international cooperation and collaboration.

     This conference, themed “Assessing Market Innovation and Development,” underscores our shared responsibility to align with market development trends and promote the assessment industry’s ability to better serve economic and social development. Through the exchanges and discussions at this conference, China will be positively influenced in advancing the professional development of the assessment field and accelerating the growth of its assessment market. Moreover, this event will help assessment organizations around the world and in various regions focus on global hot topics in the assessment field and better serve global economic and social development.

     Mr. Xu Hongcai, a member of the Party Leadership Group and Assistant Minister of China’s Ministry of Finance, delivered a warm and enthusiastic speech that underscored the Ministry of Finance’s high regard for the development of China’s asset valuation industry and reflected the Chinese government’s firm commitment to vigorously promoting modern service industries such as asset valuation. Next, I’d like to share a few thoughts on “Innovation and Development in the Asset Valuation Market.”

     First, after more than two decades of reform and development, China’s asset valuation market has achieved remarkable progress in its construction.

     The Chinese asset valuation industry emerged in response to the tide of reform and opening-up and has grown and prospered rooted in the development of China’s socialist market economy. Over the past two decades, honed by its involvement in China’s great practice of reform and opening-up, the Chinese asset valuation industry has played a vital role in promoting the healthy development of the social economy, actively contributing to enterprise reform, standardizing capital operations, optimizing resource allocation, and safeguarding socio-economic order. After more than two decades of development, the Chinese asset valuation industry has continued to grow and strengthen, initially establishing a relatively complete professional system for asset valuation services, putting in place a fairly comprehensive regulatory framework for the operation of the valuation market, and cultivating a team of valuation professionals endowed with an entrepreneurial spirit and strong professional competence. As of... 2014 By the end of the year, the number of certified asset appraisers practicing nationwide reached 3.3 Over 10,000 people, employed personnel 10 Over 10,000 people, with estimated revenue nearing... 90 Hundred million yuan, effectively meeting the demand for assessment services driven by China’s economic and social development.

     Adapting to the rapid pace of China’s economic growth, China’s asset valuation market has been growing rapidly. First, market demand continues to expand; the valuation industry has broadened its scope from serving solely the state-owned economy to serving all types of ownership structures. The intrinsic demand for valuation services within private and foreign-invested enterprises is gaining strong momentum. Second, the service chain is constantly expanding—from focusing solely on corporate restructuring, mergers and acquisitions, guarantee financing, and asset litigation—to encompassing core valuation services such as overseas M&A, accounting treatment, and private equity fund valuation. Moreover, the scope has extended to non-valuation services including due diligence, post-investment evaluation, internal control assessments for enterprises, asset allocation, and asset securitization. Additionally, the scope of services has expanded beyond enterprises to include management consulting services aimed at supporting government decision-making and social governance—for instance, performance evaluation of fiscal funds and tax base assessment. PPP Assessment, and so on. Third, the business scope continues to expand—from serving traditional industries to encompassing emerging sectors such as finance, culture, intellectual property, and the internet, as well as emerging areas like forest resources, water resources, and ecological resources. Market research data show that at this stage, China’s asset valuation market is still dominated by state-owned enterprises and securities-related valuation services, reflecting the structure of China’s asset valuation industry in supporting state-owned enterprise reform and the development of the capital market. Certification-based services remain the primary business for most valuation firms, while consulting services are also steadily growing. The development of the valuation market is significantly influenced by regional economic levels and industrial structural adjustments. The industry’s scale and layout are accelerating toward greater concentration, giving rise to a group of large-scale valuation firms with strong brands, diversified businesses, and significant economies of scale. At the same time, a number of smaller and medium-sized valuation firms have emerged, focusing primarily on single assets, boasting distinctive professional expertise, and providing specialized services tailored to regional economic development and small- and medium-sized enterprises—thus comprehensively meeting the diverse development needs of all segments of the market economy.

     The remarkable achievements in the development of China’s asset valuation market can be attributed to the following experiences: First, the rapid growth of the valuation market stems from continuously emerging market demands. The socialist market economy with Chinese characteristics represents an intrinsic demand driving the development of the valuation industry. Major economic reforms—such as the reform of state-owned enterprises, the improvement of financial and capital markets, economic structural adjustments, and optimization of industrial structures—as well as the implementation of major strategies like “rejuvenating the country through science and education,” “an intellectual property strategy,” and “revitalizing the nation through culture,” and initiatives aimed at building an ecological civilization and transforming government functions, have all generated a steady stream of valuation needs.

     Second, government policy guidance has created a favorable policy environment for assessing the healthy development of the market. Driven by the need to safeguard the rights and interests of various assets, including state-owned assets, the Chinese government has introduced asset valuation requirements, explicitly stipulating such requirements in laws and regulations such as the Company Law, the Securities Law, the Law on State-Owned Enterprise Assets, and the Administrative Measures for the Assessment of State-Owned Assets.

     The State Council, along with relevant departments such as the Ministry of Finance, the State-owned Assets Supervision and Administration Commission, and the China Securities Regulatory Commission, have attached great importance to leveraging the professional role of asset valuation and have introduced a series of policies aimed at promoting the development of modern service industries, including asset valuation, thereby creating a favorable policy environment for the maturation of the valuation market.

     Third, a robust professional system provides strong technical support for assessing the standardized development of the market. China’s asset valuation industry has established a fundamentally complete system of valuation standards and has developed a professional framework encompassing “market research, standard-setting, quality enhancement, and self-regulatory oversight.” This framework effectively guides and standardizes valuation practices, providing powerful professional support for innovation and development in the valuation market.

     Fourth, international exchanges and cooperation have enhanced the internationalization level of China’s valuation services market. The Chinese valuation industry has drawn on the experiences of valuation markets worldwide, and through in-depth international exchanges and cooperation in areas such as theory and standards, it has accelerated its process of internationalization and established a comprehensive market system that aligns with global trends in valuation market development.

     Second, we must be committed to pioneering and innovation, driving the asset valuation industry to a new level.

     The Fifth Plenary Session of the 18th Central Committee of the Party proposed that we must uphold innovative development and place innovation at the core of the nation’s overall development strategy. It can be said that innovation represents the breakthrough for China’s economic development in the future and also serves as a new engine for the transformation and development of the asset valuation market. The development history of the asset valuation industry is one of continuous exploration and relentless innovation. As the process of administrative streamlining accelerates and market vitality further unfolds, the valuation industry will encounter broader market opportunities while also facing increasingly complex business and talent competition. We must thoroughly implement the requirements of General Secretary Xi Jinping’s “Four Comprehensive” strategic layout. , Bravely taking the lead in the tide of reform, we will fully leverage the professional role of the appraisal industry in serving the comprehensive deepening of reform, promoting the building of a country under the rule of law, and safeguarding social equity, and continuously open up new prospects for the development of the appraisal sector.

     First, we must align our efforts with the nation’s goals for reform and development, and develop new approaches to assessing the market’s transformation and upgrading. In evaluating the industry’s transformation and upgrading, we should take innovative development as the guiding principle, regard enhancing innovation capability as the strategic cornerstone of industry development, integrate innovation into every aspect of market construction, and pursue a path of development driven by innovation. The structure of the service sector should be optimized and upgraded—from traditional, low-end sectors toward emerging, high-value-added ones; growth drivers should shift from statutory business to internally generated market demand; the mode of industry development should move from extensive growth toward refined development; scaling up should transition from simple mergers to substantive integration; and market competition should shift from homogeneous rivalry to differentiated competition. We should strive to create a favorable legal environment that supports the healthy and efficient development of the valuation market, with coordinated growth among large, medium, and small institutions. We must strengthen communication and coordination with relevant government departments and accelerate the promulgation of the “Valuation Law,” thereby fostering a sound rule-of-law environment for the development of the valuation market.

     Second, we must proactively explore new frontiers in valuation services to meet the demands of economic and social development. As mixed-ownership structures continue to evolve, mergers and acquisitions involving state-owned enterprises and non-state-owned enterprises are on the rise. The diversification of equity ownership and asset securitization are driving the demand for state-owned asset valuations deeper into various sectors, calling for greater innovation within the valuation industry in traditional market segments. From the perspective of the capital market, following the establishment of the SME Board and the Growth Enterprise Board, the “New Third Board” has now entered China’s capital market, and the financial market is booming. This calls for the valuation industry to leverage the characteristics of a multi-tiered capital market and step up its innovation efforts in the capital market domain. Meanwhile, as the state continues to refine its management systems for various types of state-owned assets and establishes and improves modern fiscal and tax systems, the valuation industry is expected to play a professional role in identifying value and promoting the optimal allocation of market resources. It should also intensify innovation in government procurement service areas such as fiscal project management, performance evaluation, and tax base assessment. Furthermore, the State Council has introduced policies related to property rights systems, national brand building, cultural market development, resource and environmental reforms, and support for the internet and... IT A series of new policies, including those targeting specific industries, have accelerated the development of related sectors. As a result, the scope of assessment subjects will become more diversified, and assessed industries will need to step up innovation in emerging fields such as culture, the internet, and environmental protection. Local assessment associations should, in light of these evolving needs, strengthen their guidance on market innovation for assessment institutions within their respective regions. Assessment institutions, meanwhile, must enhance their market insight, proactively identify market demands, and take the initiative to support the country’s economic and social development.

     Third, in line with the reform requirements of "streamlining administration and delegating power," we must advance the establishment of a new framework for self-regulatory oversight in the appraisal industry. The Asset Appraisal Association should seize the opportunity presented by the "deepening reform of the administrative management system, further transforming government functions, and continuously promoting streamlining administration and delegating power, combining deregulation with regulation, and optimizing services" to create a self-regulatory management system that fosters innovation and development within the industry. To meet the industry’s growing demand for expanding service areas, we must strengthen innovation in membership management and service delivery methods, attracting more outstanding talents to join the appraisal sector. We should also, based on market changes, clearly identify key areas for professional practice quality supervision, adhere to a combination of rectification and prevention, and enhance the effectiveness of regulatory efforts. Moreover, we must accelerate the integration and sharing of asset appraisal data resources, and strive to promote the construction, analysis, application, and service of big data within the industry.

     Fourth, we must focus on enhancing our assessment service capabilities and set new goals for the professional development of the assessment industry. With the aim of providing professional support for opening up new markets, we will continue to deepen research in market studies, fundamental theoretical research, practical application research, and industry management research. We will adapt to changes in assessment theory and practice, refine and optimize the framework of China’s asset valuation standards system, study adjustments and improvements to the hierarchical structure and categories of these standards, and actively promote the implementation and institutionalization of research findings commissioned by relevant departments such as the Ministry of Finance, the Ministry of Science and Technology, and the Ministry of Water Resources. We will also accelerate the development of standards for emerging fields. Furthermore, we must strengthen the revision of existing standards, striking a balance between their role as guiding norms and their function as regulatory bases, keeping pace with reforms in industry governance methods, and adapting to changes in other relevant laws and regulations.

     Fifth, we need to establish new mechanisms for talent development and recruitment tailored to the needs of the appraisal industry’s development. The crucial role of talent in the competitive market of the appraisal industry is becoming increasingly prominent. We must regard talent development as a priority strategic initiative in response to new market demands, coordinate industry-wide talent-development efforts, and innovate talent-development and recruitment mechanisms. In line with the relevant reform plans issued by the State Council, we should explore the establishment of a new system for appraiser examinations, assessments, and evaluations, thereby attracting more outstanding talents to join the ranks of appraisers. We must strengthen the updating of industry professionals’ knowledge structures and enhance their professional competence. We should step up efforts to cultivate high-end industry talents, senior management personnel, key personnel, and industry instructors, further fostering a virtuous cycle of identifying and utilizing talent, attracting and retaining talent, and continuously developing and improving talent. Local associations should increase financial investment, aligning their efforts with industry development to nurture regionally-based key personnel and strive to effectively aggregate industry talent. Appraisal institutions should proactively take the initiative, adhering to a combination of talent development and recruitment, establishing sound mechanisms for scientific talent selection, training, evaluation, utilization, compensation, and promotion incentives, and continually enhancing the professional ethics and technical competence of the appraisal workforce.

     Third, we will strengthen international exchanges and cooperation to jointly promote the development of the asset valuation profession.

     Internationalization has become an inevitable choice for the development of China’s asset valuation industry. One of the key measures to respond to the new normal is to actively build a new open economic system. Currently, Chinese enterprises’ strategies such as “Going Global” and the “Belt and Road” initiative are being steadily implemented. The growing number of state-owned property rights held overseas and the increasingly active overseas investments by private enterprises have provided significant opportunities for China’s asset valuation industry to go global. From a long-term perspective, China’s capital market will inevitably integrate into the global capital market, attracting numerous foreign companies to invest and raise funds in China’s capital market, thereby creating even greater market opportunities for the asset valuation industry. Asset valuation firms must continuously extend their service networks both domestically and internationally, actively explore various forms of cooperation with overseas valuation institutions, and provide specialized services for leveraging foreign investment, overseas investment, the construction of international cooperation zones, and overseas engineering contracting, thus offering technical support for the country’s implementation of its strategy of opening up to the world economy.

     As domestic and international markets continue to integrate and international cooperation and competition increasingly expand, peer evaluation organizations in various countries should continuously strengthen their exchanges and collaboration. China has already established connections with evaluation organizations in numerous countries and regions and has engaged in various forms of academic exchange with international evaluation organizations, thereby becoming a significant and influential force in the global evaluation community.

     To deepen international market cooperation, China will further strengthen pragmatic collaboration with assessment organizations from various countries, jointly promoting mutual recognition of standards, data sharing, and cultural exchanges. By learning from each other’s market experiences, we will create a favorable external environment for the innovative development of assessment institutions worldwide and strive to establish a deeply integrated, collaborative framework for the global assessment industry.

     Reform is the driving force behind the development of our industry, and innovation is the solid foundation that enables us to gain a firm foothold in our transformative journey. Let us join hands, seize the development opportunities brought about by the new normal in the economy, and continuously inject fresh momentum and open up new horizons for our industry’s growth. I hope that everyone will forge ahead with determination amid the tide of reform and innovation, strive boldly to take the lead, realize their dreams, and make positive contributions to promoting the healthy development of China’s economy and society, as well as to the sustained prosperity of global markets.

     (This article is authored by the author.) 2015 Year 11 Moon 12 Keynote speech delivered at the 7th Congress of Evaluators of the World Federation of Organizations for Assessment, with excerpts omitted.