Deepened China-ASEAN cooperation to safeguard financial stability (2)

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Since the 2008 financial crisis, China has rolled out measures to support regional economic stability, including setting up the China-ASEAN Investment Cooperation Fund. The overall scale of the "Chiang Mai Initiative" multilateralization agreement has expanded to 240 billion U.S. dollars.

China's central bank has signed bilateral local-currency swap agreements with counterparts in Asia that total 1.4 trillion yuan (about 226 billion U.S. dollars), the central bank's deputy governor Yi Gang announced to the forum.

Premier Li Keqiang on Tuesday called for a strong, multilayered regional financial safety network and substantial implementation of the bilateral local-currency swap agreements.

China also encourages crossborder trade and investment settlements in local currency and will facilitate ASEAN institutions to invest in Chinese bond markets, Li said.

Han Mingzhi, Chair of the board of supervisors at China Merchants Bank, said promoting settlement in local currency would reduce risks from overdependence on third-party currencies, which is believed to have been central to previous Asian financial crises.

Use of renminbi can improve local financial structure and reduce financial risk for ASEAN members, said Cao Yuanzheng, who still sees plenty of room to improve international use of yuan, especially as a foreign reserve currency and in developing Asian bond markets.

So far among ASEAN countries, only Malaysia and the Philippines have brought yuan into their foreign currency reserve systems.

Bank of Communications' chief economist Lian Ping credits ASEAN members with working out better financial supervision and risk prevention, and is pleased with higher levels of transparency in information disclosure.

"The possibility for the 1997 Asian Financial Crisis to be repeated is low," Lian told Xinhua, adding that a stable Chinese economy and world economic recovery will bring stability to ASEAN economies.

"China-ASEAN financial cooperation is perhaps a greater challenge for China, as it requires a vast, stable internal financial market to back up international use of the yuan," Cao Yuanzheng added.

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