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China Needs to Deal with Six Matters on Financial Industry
The 8th APEC Finance Ministers' Meeting of the Asia Pacific Economic Cooperation (AFMM) is scheduled to be held during September 8-9 in Suzhou, a well-known scenic city of east China's Jiangsu province. The news center for the APEC Finance Ministers' Meeting revealed September 5 that China's financial industry is confronted with six key problems in the new century. They are as follows:
1. Under the current circumstance of China's impending entry into the WTO, the Chinese government will enhance banks' competitive power, amend and perfect existing financial laws and rules, so as to set up a perfect financial legal system adaptive to China's system of socialist market economy.
2. To deepen the reform and enhance the competitive power of China's financial industry, including to made perfect the banking service system, develop securities, expand direct financing and develop insurance industry to ensure economic development.
3. A series of measures needs to be taken for raising China's level for macro-financial regulation. These include the better using interest rate and deposit reserve rate, publicizing market business and re-loaning, and reasonably adjusting money supply in accordance with the economic development; adapting to the situation for a free evolution of finance and using money policies effectively; withdrawing all restrictions on interest rate to realize market-oriented interest rate in such an order as to open up money market interest rate first and then the loan interest rate and finally deposit interest rate; developing the capital market, setting up the main body for multi-market investment and increasing the proportion of direct financing; reforming the money market system by establishing a unified, flexible and effective money market; probing new channels for the central bank to handle basic currency so as to smooth capital flow; quickening development of modern payment system; perfecting laws and rules on financial supervision and management for creating a fair financial environment.
4. To promote and set up a modern banking business system to cope with the challenge of international competition. This include the multifarious, international and electronic-controlled way in handling China's banking operation and rendering the banking capital into securities
5. To strengthen the supervision and management, ensure the safety of the state's economy and finance.
6. To further open to the outside world and raise the international status of China's finance industry. The foreign-capital financial institutions in China are part of China's financial system. After China's entry into the WTO, the banking, securities, and insurance will be gradually opened up. Meanwhile, the Chinese government will support qualified Chinese financial institutions to set up business branches abroad, further perfect the system in the forming of exchange rate, maintain a stable RMB exchange rate, and make research and create conditions for realizing the free exchange of the people's currency.
By PD Online staff member Huang Ying
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