Chinese banks to expand globally as financial market opens up: official

By Ma Jingjing Source:Global Times Published: 2018/3/9 22:08:40

Foreign financial institutions will also be under prudent regulation

Opening up the Chinese financial market also includes the global expansion of domestic financial institutions, China's top bank official said on Friday.

"China could take more bold actions to relax market access and to further open up. Aside from permitting overseas financial institutions to do business in China, opening-up in broader terms also means Chinese financial institutions would go global," Zhou Xiaochuan, governor of the People's Bank of China (PBC), the country's central bank, said at a press briefing on the sidelines of the ongoing two sessions.

The yuan's internationalization contributes to the opening up of China's financial sector, he noted, adding that other aspects were also significantly opening up.

In the past five years, China has made progress on currency convertibility through the launch of stock and bond connects between the Chinese mainland and Hong Kong, Zhou said, noting they are all part of the country's opening-up. Zhou stressed this opening-up trend will continue.

Authorities have studied most of the related policies and will find opportunities to advance the progress, Zhou said.

In this regard, an expert on macroeconomics said he expects more financial sectors to open up.

"The domestic banking sector's opening-up moves fast. If this creates a positive influence, other financial sectors including trust and financial lease will further open up," said Liu Xuezhi, a senior expert on macroeconomics at the Bank of Communications.

He told the Global Times on Friday that the entry of foreign financial institutions will accelerate domestic financial institutions' internationalization as well as their services level.

Yi Gang, vice governor of the PBC, said at the same press briefing that granting equal treatment to domestic and foreign investors does not mean loosening supervision.

Like their Chinese counterparts, foreign-backed financial institutions will be under the same prudent regulation so as to contain risks and maintain financial stability, Yi said.

Zhou also talked about financial reform, saying the country's financial supervision system reform is in process.

After the reform, the central bank will play a crucial role and strengthen coordination between every financial regulator to fill the regulatory gap, according to Zhou. He said forestalling risks is part of financial reform.

Also at the press briefing, Pan Gongsheng, another PBC vice governor, said that the risk of China's real estate financing is controllable, supported by the overall sound quality of property loans.

China's banking sector's overall nonperforming loan rate is 1.85 percent, while that for real estate loans is less than 1 percent, Pan said, noting prudent monetary policy will help promote the development of the domestic housing market.

"We will continue to improve regulatory mechanisms to effectively prevent and resolve financial risks and maintain financial stability," Yi said.

Posted in: ECONOMY

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