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People's Daily Online>>China Business

Wenzhou to pilot private investment overseas

By Gao Changxin (China Daily)

08:20, March 29, 2012

State Council allows private finance to play a bigger role

Wenzhou won Beijing's approval on Wednesday for a landmark financial pilot project that will allow residents of the coastal city to, among other things, invest privately overseas and set up loan companies.

At a State Council executive meeting chaired by Premier Wen Jiabao, the government selected Wenzhou in eastern Zhejiang province, a city with a deep tradition of entrepreneurship, to be a "pilot zone" for a series of financial reforms.

The decision was hailed as a "milestone" by Wang Jianhui, chief economist with Southwest Securities, as it showed the government's determination to lead "the reforms that are urgently needed".

Owners of private businesses welcomed the move. "I see a lot of new investment opportunities coming up," said Zhu Jianfeng, general manager of Gold Emperor Group, a Wenzhou-based shoemaker. "We will wait for the full details to emerge and then see what we can really do."

The State Council decision covered 12 major points, which include developing privately owned financial services, setting up village banks and rural financial co-ops and encouraging lending by State-owned banks to smaller businesses.

The government of Zhejiang province was required by the State Council to set up a working group to lead the implementation of the reform program and to work closely with the People's Bank of China.

A communique after the cabinet meeting said: "It is imperative to launch comprehensive financial reform in Wenzhou in order to iron out long-standing problems in local economic development and lead private fund-raising activities to develop in an orderly way to strengthen their capability to serve the real economy."

Such comprehensive financial reform is "of the utmost importance, not only for Wenzhou, as it can serve as an example for financial reform and economic development nationwide," it said.

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