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China to Deepen Financial Reform: Senior Banker
China will deepen the reform of its banking system in the coming several years to raise the competitive power of Chinese banks while more foreign banks expand their business in China, a senior Chinese banker said Wednesday.
China will gradually get rid of the debt burdens of state-owned commercial banks and build a modern commercial banking system with the introduction of joint-stock mechanism, Liu Tinghuan, deputy governor of the People's Bank of China, said at a commercial banking conference held in Macao.
Such reformed share-holding commercial banks and municipal commercial banks throughout the country will compete with each other and only the strong ones survive, Liu said.
Step by step, the management of interest rates will be actually based on monetary supply and demand in the financial market with the interest rates of the central bank acting as the basic regulating level, the banker said.
The control over the interest rates of foreign currencies will be lifted first and the rates of Renminbi afterwards. The control over interest rates at financial institutions in rural areas will be lifted first and in urban areas afterwards. The control over lending rates will be lifted first and deposit rates afterwards, he said.
At present, foreign capital is not allowed to set foot in China 's securities market. The central bank will exert active efforts to achieve capital-account convertibility in accordance with the reform of the country's financial reform and the supervising capability of the central bank, the deputy governor said.
On the whole, China will improve the financial law system along with the opening-up of the financial market, the operation of foreign financial institutions in China and the international trend of financial supervision, Liu Tinghuan said.
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