China's Central Bank to Further Support Development of Stock Market

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Last updated at: (Beijing Time) Tuesday, January 15, 2002

China's Central Bank to Further Support Development of Stock Market

China's central bank will continue to support the development of the domestic stock market by means of monetary policy while strengthening market regulation, bank governor said Tuesday.

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China's central bank will continue to support the development of the domestic stock market by means of monetary policy while strengthening market regulation, bank governor said Tuesday.

Dai Xianglong, governor of the People's Bank of China, said at a press conference the linkage between the domestic currency market and capital market will be one of the major concerns of the central bank this year.

Chinese enterprises depend too much on bank loans rather than raising fund directly from the capital market, and this puts banks, especially state-owned banks, in great risk, Dai said.

Last year, the enterprises got about 100 billion yuan (12 billion U.S. dollars) from the stock market, but the total bank loans extended to them grew by more than 1,300 billion yuan (156.6 billion U.S. dollars).

The central bank has worked out a series of measures to support the development of the stock market while making greater efforts to scrutinize the illegal entry of credit fund into the stock market.

Dai said once better managed, the domestic stock market will develop in a stable and healthy way as China has witnessed a strong economic growth, stable local currency, sufficient foreign exchange reserve and relatively low foreign debts.

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