(Yicai Global) June 22 -- Goldman Sachs will be paying close attention to the development of its China business as the world's second-largest economy looks to open its doors even wider to the rest of the world, according to the investment bank's president.
China will benefit from the open market while foreign companies will be able to embrace new opportunities, state-owned news agency Xinhua cited David Solomon, who is expected to become chief executive by the end of this year, as saying at a June 20 press briefing. The key reason behind Goldman's continued investment in China is a belief that it will further open its financial market, he added.
Beijing has been making major strides forward in its mission to open up the financial market to the rest of the world. Last week, it eased restrictions governing its dollar- and yuan-based Qualified Foreign Institutional Investor Program; at the end of May, more than 200 mainland-listed shares joined the MSCI Emerging Markets Index; and the country plans to activate the link between its Shanghai bourse and the London Stock Exchange later this year.
The world economy is relatively sound, and over the past 12 months global activity has been moving forward, Solomon continued, saying major economies like the United States, China and the European Union were performing well.
As the global economy recovers, investors are becoming increasingly keen to find new opportunities, he added, saying the 2008financial crisis was mainly down to high leveraging in the financial system, but current risks boil down to sovereign debts and a change in monetary policies.
The market believes that normalization of monetary policies at the Federal Reserve and the European Central Bank will be carried out progressively, but there needs to be the awareness that fluctuations will occur and could adversely affect market sentiment, in turn influencing the capital market, he said.
Editor: James Boynton