China and EU endeavor for closer financial ties

UPDATED: 17:30, June 15, 2007

The intensive and extensive exchange of visits recently between Chinese and EU delegations show an intention to establish closer ties in the financial sector after China opened up its service industry.

On June 12th, Mr. McCreevy, Commissioner for the Internal Market and Services of the European Commission, gave briefs during his meetings with the leaders of Chinese authorities in the financial sector.

His "fruitful exchange" on regulatory policies with Mr. Zhou Xiaochuan, governor of the People's Bank of China, will lead to a China-EU Roundtable on Financial Services and Regulation in October in Brussels, Belgium.

The Chinese Ministry of Finance will meet early in July with Mr. McCreevy's department "to discuss further macroeconomic and regulatory issues". Chinese regulatory authorities for banking, securities and insurance "will play a vital role" in those meetings, said Mr. McCreevy.

The June 11th meeting between Chinese vice Finance Minister Wang Jun and Mr. McCreevy focused on the issue of the auditing and accounting standards. They agreed to have meetings on a regular basis to discuss the process of the convergence and equivalence of Chinese Accounting Standards with International Financial Reporting Standards.

The Chinese Accounting Standards, together with the Chinese Auditing Standards, are effective within all Chinese listed companies and CPA firms beginning from January 2007. Listed companies on the European market have to follow the IFRS from January 1, 2005.

Mr. McCreevy told his Chinese colleagues that the EU would make decisions on the equivalence of the Chinese standards by the end of 2008.

Mr. McCreevy's visit coincided with the annual China-EU trade talks in Brussels on June 12th, between Chinese Commerce Minister, Bo Xilai, and EU trade commissioner, Peter Mandelson.

The latest figures show that China's trade surplus has risen robustly by 23.7 percent over the first five months until May of this year. In response to the EU's concern for its trade deficit with China, Mr. Bo said Europe has enjoyed advantages in the service sector and yields much from its investment in China.

The EU hopes China will open the financial service sector even more; especially raising the caps on twenty to twenty-five percent of foreign stakes in the banking sector.

The Ministry of Commerce said that twelve agreements had been made during their meeting. The most important one is the agreement to launch negotiations to improve the trade and economic partnership protocol signed in 1985.

Mr. Bo Xilai also said the two sides should continue communication and exchanging information on financial information service, IPR, value-added telecommunication service, and raw material supplies.

However, China expressed its "regret" over the EU's updated report on China's market economy, which concluded that China failed to meet four of the five standards of a market economy.

The spokesman of the Commerce Ministry criticized the report for not reflecting, in an objective manner, the "real picture" of the construction of China's market economy. He also said the EU standards were too "rigorous" and there was inconsistency in the assessment process.

By People's Daily Online

People's Daily Online ---