Int’l finance expert: China must improve funding cycle

16:13, September 19, 2010      

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As an emerging market China should improve the funding cycle if it hopes to achieve balance in capital, said Marc Uzan, executive director of Reinventing Bretton Woods Committee in Beijing on Sept. 7.

“The challenges faced by emerging countries are quite different from developed countries, some of which are now facing debt crisis,” Uzan said.

Uzan said at present, all countries in the world are now applying more cautious macro-economic policies. The United States will adopt a number of policies to rebuild financial stability and credibility. It hopes central banks of other countries will take up those measures and policies as well.

“The Basel Committee on Banking Supervision will reach an agreement on how to redefine capital and when to impose borrowing caps on banks worldwide by the time G-20 leaders gather in Seoul in November,” Uzan said.

According to Uzan, leverage ratio should be controlled during the reform in financial institutions to avoid the recurrence of the financial crisis. This is a point on which the majority of the central banks across the world have reached consensus.

Uzan said China's growth rate will gradually decline for it is quite hard to maintain a growth rate as high as 10 percent in the current international economic situation.

“In that case, an appropriate economic policy and social welfare system should be drawn up in China”, said Uzan.

Meanwhile, he said it is quite important to guarantee the income of the labor force in China “not only in large cities like Beijing, Shanghai and Shenzhen, but other small and medium-sized cities.”

Uzan is the founder and executive director of the Reinventing Bretton Woods Committee that founded in 1994. The committee is a think tank focusing on the restructure of the international financial infrastructure through regular dialogues between markets and governments.

By Li Mu, People's Daily Online


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