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Fund Industry Welcomes Reform
China is wrapping up co-operation with foreign fund management companies to promote reform in its fund industry and facilitate the introduction of open-ended fund.
"We need reform that brings renovation and a more diversified structure of the stock market to feed different direct financing requirements," said Zhou Xiaochuan, chairman of the securities watchdog, the China Securities Regulatory Committee.
"The development of the fund industry plays a pivotal role in the reform. It should be bold and creative, and based on experience from abroad," Zhou said while addressing an international seminar on fund management in Beijing.
"Foreign investment managers are welcome to provide technical assistance to help China design a feasible growing mode for the funds," he said.
The introduction of foreign experience will also make China better prepared for the opening of the stock market after its expected entry into the World Trade Organization (WTO). "When time is ripe, I mean, after China's accession to WTO, we will set up a jointly-invested fund," he said.
Top legislators confirmed recently that China will allow foreign investors to set up jointly invested fund management firms in the near future.
Through professional investment management and concrete information sources, the fund will help upgrade investment efficiency and lower the cost of trading in China's stock market, which is still dominated by retailers and calls for more institutional investors.
It needs enhanced confidence among the public in fund management and a clearer legal framework, experts said. Currently, China has 10 fund management companies and 25 funds operating 51.1 billion yuan (about 16 billion US dollars), all of them belonging to a close-ended securities investment fund."
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