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Capital Market to Play Great Role in China's Economic Development: Expert
China's capital market has to expand in the next decade for capital market is the fuel for growing economies and China should make structural reform to speed up the development of the market, said Gary G. Benanav, chairman and CEO of New York Life International in a recent exclusive interview with Xinhua on the sidelines of the 34th PBEC International General Meeting in Tokyo.
China should expand stock market and bond market to provide fuel for the development of other industries, Benanav said. "China should develop debts market for it is needed by financial investors, individual investors and life insurance companies. The long-term debts especially should be expanded. Banks only provide short-term assets and insurance companies collect money from people for many, many years. China can use the money to build highway, road and houses. But the infrastructure must be built including legal system to guarantee the borrowers can pay back the money," he said.
"Insurance companies will be significant investors on financial market. They collect small amounts money from many people and provide financing for projects. People put money in insurance companies and insurance companies provide financing for economic development, economic growth increase income of people and people buy more insurance contracts. That's a good cycle," he said.
For China's economy, Benanav said that it has done very well in the past few years. China has done an excellent job during the financial crisis, citing that China did not devalue RMB and achieved growth in the difficult time, which was admired by other countries.
At present the economy of the United States is softening, Japan ' s economy doesn't show any sign of growth and the economy in Europe is not that positive as people expected. Benanav believed that China's economy will still remain big growth by six to seven percent this year unless the economy of the United States declined quickly.
New York Life Insurance Company has obtained the approval of making preparations for setting up joint venture. It is now choosing cooperation partners.
New York Life Insurance Company set up Shanghai Representative Office in August 1994 and representative offices in Guangzhou in 1995; Beijing in 1997 and Chengdu in 1999.
Some 800 business leaders in the Asian Pacific region participated the meeting which was held in Tokyo from Sunday to Tuesday.
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