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Financial Sector to Open Wider to Outside World: Dai
China will further open up its financial institutions in the next few years, creating fresh opportunities for foreign investors, central bank governor Dai Xianglong said Thursday.
Speaking at the luncheon for the ongoing "21st Century Forum -- Conference 2000", Dai, governor of the People's Bank of China, said that five years after China's entry into the World Trade Organization (WTO), foreign companies and foreign banks in China will enjoy "national treatment".
"These developments will provide fresh opportunities and broad markets for foreign investors," the governor said, adding that " the opening up of the financial sector will enter a new era."
China is about to initiate the 10th Five-Year Plan (2001-2005) and make strategic adjustments to the economic structure, Dai told the conference, which was hosted by the National Committee of the Chinese People's Political Consultative Conference. (CPPCC).
The central bank governor pledged that the government will continue to maintain the value of the Renminbi, and promote the economic growth.
"To this end, the central bank will strike a delicate balance between financial risk resolution and the promotion of economic growth, improve our competence in monetary policy conduct and increase money supply appropriately," Dai said.
China will press ahead with the interest rate liberalization, setting the interest rate system with the central bank-determined rate as the benchmark. The money market rate will be the intermediary and the deposit and loan rates will be determined by the market.
Dai also noted that the country will establish a modern commercial bank system. The state commercial banks will be recapitalized in a number of ways and in a timely fashion. Efforts will be made to transform eligible state commercial banks into joint-equity corporations with the government as the dominant share-holder, Dai said.
"With China's accession to the WTO, we will press ahead with the capital account convertibility process gradually," the governor said.
China will strengthen its cooperation with other central banks in Asia and other parts of the world to explore regional monetary and financial stability mechanisms in Asia so as to prepare China for strengthened integration with and greater role in the world economy, Dai noted.
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