Zhou Qinye

Deputy President, Shanghai Stock Exchange

I feel deeply honored to be able to attend the 17th XBRL International Conference today. It is a great pleasure for me, as a representative of Shanghai Stock Exchange,to meet so many friends from all over the world and share your successful experiences in the research and application of XBRL. Despite being a later comer in XBRL application, Shanghai Stock Exchange has made substantial progress in less than four years in using XBRL in corporate disclosure by listed companies. I would like to share with you our experiences and thoughts in the following three areas.

I. Review on the development of XBRL in China in the past four years

As early as 2002, China Securities Regulatory Commission (CSRC), China's securities watchdog, Shanghai Stock Exchange (SSE), Shenzhen Stock Exchange, Shanghai New Lido Data Technology Co., Ltd. and Genius Co., Ltd. began research on XBRL. After more than one year of preparation, the SSE unveiled the XBRL Pilot Project at the beginning of 2004. By April 30, 2004 when the project was completed, 118 companies (representing 14% of all the SSE-listed companies) filed the instance documents of their 2003 annual report summaries and 730 companies (representing 87% of all the SSE-listed companies) filed the instance documents of their 2004 first quarter reports.

The application of XBRL has grown from being limited to brief financial data to gradually cover various periodical reports of listed companies, including report summaries, quarterly reports, half-year reports and full annual reports. The number of elements defined by information disclosure taxonomies has also increased from the initial around 500 to roughly 4000. At the outset, we only had taxonomies for industrial and commercial listed companies. Later, a taxonomy for financial listed companies was added. With regard to the promotion and development of XBRL in China, initially, only Shanghai and Shenzhen stock exchanges were committed to the adoption of XBRL. Currently, there is wide participation from government agencies, regulatory authorities, academic institutions and universities, intermediaries, software vendors, and other organizations and individuals. With the roll-out of XBRL-based listed company disclosure products in 2007, XBRL further expanded its influence in China. I would like to take this opportunity to give our special thanks to all the international organizations, experts and institutions that have afforded assistance and guidance to us in the past few years and we also sincerely hope that we will further have your care and support in the future.

II. Thoughts and experiences gained from SSE’s use of XBRL

While China was late in using XBRL, we have made significant advancement in adopting XBRL for listed companies’ information disclosure. Looking back on these years, I would like to share with you four thoughts as follows.

1. Governmental support is critical. The CSRC has always been active in organizing and promoting the introduction and application of XBRL in China. It has also, together with the National Committee for Standardization, upgraded the Listed Company Information Disclosure Taxonomy to a national standard. This provided favorable external conditions for the fast development of XBRL in China.

2. Help from XBRL International Organization and experts is very valuable. At the very beginning of SSE’s XBRL Pilot Project, we invited experts from XBRL International and PriceWaterhouseCoopers to evaluate and validate our technical plan. Later, Mr. Kurt Ramin, former Chair of XBRL International Steering Committee, Mr. Michael Ohata, current Chair of XBRL International Steering Committee and Ms. Liv Watson, Vice President of Edgar Online, made visits to China and gave their guidance and help in our push for the development of XBRL in China and our preparation for China jurisdiction of XBRL International. Though XBRL China is yet to be established, with the help of XBRL International, we have made many fruitful efforts in this regard.

3. Leveraging the breakthrough in specific project to create a platform for XBRL application. We have focused our efforts on XBRL filing system which allows listed companies to file XBRL-based periodical reports. Next, the program will expand to include ad hoc reports of listed companies, reports of fund companies and reports of IPO and refinancing companies.

4. Building an industry chain of information services. On the international front, SSE InfoNet Ltd., a wholly owned subsidiary of the SSE, established business relationships with Edgar Online, a founding member of the XBRL Consortium, and Bloomberg. In January 2006, Edgar Online announced that it would deliver SSE-listed company fundamental data in XBRL format, together with a suite of its interactive data and analytical tools called I-Metrix, to global financial institutions, corporations and professional consultants. At home, SSE InfoNet Ltd. teamed up with Beijing Compass Technology Development Co., Ltd. and Shanghai New Lido Data Technology Co., Ltd. etc. to roll out Topview company information product in XBRL format. This indicates that the SSE has successfully established an entire industry chain from information sourcing and information integration to marketing of information products.

Apart from the favorable environment and our own efforts, the rapid application of XBRL in company reporting is also attributable to the attention we have paid to the following four aspects.

1. Due consideration to client needs. Changing clients’ work habits has always been a daunting task. To attract more listed companies to use our reporting system, we developed a template tailored to the clients’ habits with a user-friendly and easy-to-use interface. The template makes reporting as easy as editing a Word document file. Additional functions such as the availability of annotations and an index to laws and regulations also help reduce workload for clients.

2. Adequate logistics support. The deadline for listed companies to prepare and release their periodic reports is very tight. To ensure that listed companies are able to produce and file instance documents compliant with relevant requirements in a short period of time, we increased logistics and support personnel and service hotlines to enable timely response to the questions raised by listed companies concerning the use of XBRL.

3. Participation of intermediaries. Today, a growing number of people in China are involved in the research and promotion of XBRL. They are from various circles including, among others, government agencies, academic institutions and universities, intermediaries and software vendors. There are also more and more academic papers, application software and analytical tools related to XBRL. In other financial, social and economic fields, more projects are conducted using XBRL.

4. Great importance placed on XBRL. China’s success in using XBRL is, on the one hand, due to its later comer advantage in that we can draw on and learn from international mature experiences and well-established practices. On the other hand, it is also closely associated with the unswerving efforts made by the SSE leaders in implementing and adopting XBRL. With regard to applying XBRL to full annual reports and ad hoc reports, there were no experiences available in the world for us to share. Through scientific practice, we not only solved this tough problem, but also contributed to the application of XBRL in areas beyond financial reporting.

III. SSE’s next agenda

To boost the use of XBRL in even wider fields and areas, the SSE will devote its efforts to the following four tasks in the future:

1. Advancing fund company reporting using XBRL. The SSE is tasked by the CSRC to develop the XBRL filing system for fund companies. Currently, we are already working on trial run of the XBRL filing system. The launch of the system will raise the disclosure quality of fund companies and improve regulatory efficiency while expanding the areas of XBRL application.

2. Accelerating the application of XBRL in IPOs and refinancing activities. So far, the 1500-plus listed companies in China have had all their financial statements for the past three years converted into XBRL format. However, the data filed for IPOs and subsequent offerings have not yet been standardized. This will impact the integrity of the corporate data of listed companies and also impede improvement in regulatory efficiency. We are currently working on the preliminary feasibility study and preparation for the project.

3. Adopting digital signature in XBRL application. To ensure security and tamper resistance of XBRL instance documents, we have started cooperation with accounting firms and software suppliers and explored the possibilities that certified public accountants could provide audit and assurance to instance documents and use digital signature techniques.

4. Further promoting the establishment of XBRL China. Due to various reasons, China jurisdiction of XBRL International has not yet been established. However, we have established a standing group with dedicated staff to keep in touch with XBRL International. The SSE is a direct participant member of XBRL International Consortium and undertakes the task of maintaining the website of XBRL China (www.xbrl-cn.org) in the future. Looking forward, we will continue to support the establishment of XBRL China with input of more human and physical resources.

To sum up,the SSE has been actively involved in promoting the adoption of XBRL in China in the past four years. We have built up massive information resources and are beginning to have some international influence. Our achievements in the application of XBRL have already been included in the best practice cases for 2007 by XBRL International.

China is an ancient civilization while XBRL is a new thing characterized by innovation and vitality.  I believe that, combined with the practice of application in China, XBRL will certainly produce more brilliant results in China.

Thank you.

The original text can be download herePPT for 17th XBRL conference.pdf