(Yicai Global) March 6 -- China will continue to expedite its financial opening-up this year, the party secretary for the country's central bank has said at the annual meetings of the National People's Congress and the Chinese People's Political Consultative Conference, the country's top political advisory body.
"China and the US can definitely reach a consensus on financial opening-up," said Guo Shuqing, party secretary of the People's Bank of China and chairman of the China Banking and Insurance Regulatory Commission.
China has been opening up the sector through its own initiative to meet demands in the country since the reform and opening-up policy started 40 years ago, he said, adding that the two countries have had numerous exchanges related to finance and the US could abandon its accusations that China is an exchange rate manipulator in the future.
Guo stated that the achievements made during the seventh round of trade talks between the two countries warrant attention, adding that "further financial opening-up is inevitable."
The opening-up of the finance sector has accelerated since last year with measures including the easing of foreign ownership restrictions, liberalizations in market access and improved regulatory rules for foreign institutions. Many foreign banks and insurance firms received approvals to enter the China market in 2018, Guo said, adding that existing foreign players have also expanded their business scope and the trend will continue this year.
Providing financial support to private firms goes hand in hand with supply-side structural reform in the finance sector, he stated. China should adjust its institutional, market and product systems.
China's big five commercial lenders and 12 joint-stock commercial banks have set up the inclusive finance divisions specializing in loans and services for small firms, Guo noted, adding that loans to customers with a credit line of up to CNY10 million (USD1.5 million) rose by over one-fifth last year, representing the sector's fastest-growing area. The government aims for a 30 percent rise, according to a working report for this year and Guo said the goal was achievable.
Aside from the banking system, China will also make efforts in insurance, Guo added, saying that the sector boasts around CNY16 trillion in investment funds for private and small firms as well as micro-businesses.
China should do more for direct financing to build a stronger capital market and provide better support for innovative firms. In particular, the country should develop multi-level capital markets, including large exchanges, regional equity markets, private equity and venture capital funds, which have been proven to be good investment channels overseas. They can give greater support to firms and products that feature stronger innovation capabilities but greater risks and potential for failure, he said, adding that the supply-side structural reform is multifaceted.
Editor: William Clegg