|
| Chinese finance hits world markets |
|
|
| |
|
At the 3rd National Financial Work Conference, which concluded on January 20, it was made clear financial reform in China is at a new stage and that the financial sector is at an important stage of transformation and development. The following six key words may help people understand the spirit of the conference and get some insight into China?s priorities in financial work over the next few years.
Key word 1: "deepening reform"
It was stressed at the conference that China must continue to deepen the reform of state-owned banks and accelerate the building of a modern banking system.
Historic achievements have been made in recent years by the joint-stock reform of state-owned commercial banks, but the banks still need to improve corporate governance, internal controls and basic management before a modern banking system can be established.
?The transition of a banking system and mechanism, improvement of management and internal controls cannot be achieved overnight,? said Professor Zhang Xiaode from the China National School of Administration.
The emphasis on ?deepening reform? shows the Party and the government?s determination to do a good job in the reform of state-owned commercial banks, which will continue to work towards the final objective of being ?large modern banks with sufficient capital, tight internal controls, safe operations and quality service, that perform strongly, are innovative and internationally competitive.?
Key word 2: "rural finance"
China needs to accelerate rural financial reform and improve the rural financial system. One of the Party and the government?s top priorities is to address the three agriculture-related problems (agriculture, farmers and rural areas). Despite the progress made in the last few years, rural finance remains the weakest link in the whole financial system, which is obvious in the defective structure and operation mechanism, the scarcity of institutions, the lack of choices in product and service, and the difficulty in getting loans.
At the conference a series of measures were laid out to build a sustainable, multi-level, expansive financial system in rural areas to better serve agriculture and farmers.
Key word 3: "expanding direct fund raising"
The conference also stressed expanding the proportion and scale of direct fund raising. Since last year, marked progress has been made in domestic stock market reform focusing on a split share structure. However, an imbalance still exists in banking, securities and insurance development, with the capital market and insurance market lagging behind and a low proportion of funds raised directly from stock and bond markets.
By building a multi-layered financial market system, the conference sends this message: China?s capital market will develop in a sound and sustainable way based on improved institutional construction, and the quality of listed companies will be boosted and market transparency increased. The securities market will develop fast by relying primarily on expanding the issuance of enterprise and company bonds. The disproportion in enterprises? fund raising will be addressed.
Key word 4: "financial regulation"
The conference proposed making financial regulation more adaptive, scientific and efficient. Financial regulation is an important part of state macro-regulations. As the Chinese economy has been running smoothly for quite a few years at a growth rate of about 10 percent, finance has played an increasing role in optimizing the distribution of social resources, regulating and serving faster, better economic growth. However the ?serving? and ?regulating? functions of the financial system must be allowed to play a more effective role to meet social and economic needs by focusing chiefly on controlling the total amount of money and credit and optimizing the credit structure.
Key word 5: "Opening up to the outside world"
Opening the financial sector was also stressed at the conference. China has apparently accelerated the opening up of its financial sector. As of the of September 2006, 73 foreign-funded banks from 22 countries and regions had set up business institutions in China; 30 financial institutions from 13 countries and regions had established joint security or fund companies; and foreign-funded insurance companies from 15 countries and regions had set up 115 business institutions. Fiercer competition is expected as China?s financial sector opens further to the outside world at the end of its WTO transitional period.
?By further opening the financial sector we can bring in advanced managerial expertise, technology and personnel, accelerate financial innovation and boost the system?s efficiency and competitiveness,? said Zhong Wei, a professor from Beijing Normal University. ?At the same time, we must safeguard national financial security.?
Measures put forward at the conference, including optimizing the opening-up structure and gradually opening the capital market, will help improve fair competition between Chinese and foreign-funded financial enterprises and promote the sustainable, sound development of China?s finance sector.
Key word 6: "financial supervision"
Boosting financial supervision was proposed at the conference. In recent years, increasing financial supervision has helped to guarantee safer operation in this sector. The task will only grow bigger as reform deepens, more areas open up, financial operations become more complicated and risks increase.
The conference proposed increasing financial supervision, strengthening internal management of financial enterprises and perfecting financial laws. A coordination mechanism will be established while improving the supervision of various parts of the financial sector.
The conference put a focus on both stronger capability and a wider range of measures for financial supervision, and in particular the flow of cross-border short-term and speculation capital. |
|
| |
|
|
| Heads of delegations or other officials are kindly requested to advise the Secretariat well in advance of the meetings,of the full composition of their respective delegations,including,if any,members from diplomatic missions and their staff. More>> |
|
Designed by People's Daily Online
Make this My Homepage 
