China needs to open financial sector wider to foreign investors: professor

Source:Global Times Published: 2019/11/19 14:20:32

Passengers pass US insurance firm AIA Group's office in Shanghai. File photo: VCG

Opening China's financial services to foreign investors has been listed at Beijing's high agenda, in its attempt to integrate the world's second largest economy closer with the global financial system, a top Chinese finance professor said.

China's opening-up level in its financial sector is much lower than other sectors of the economy, which will inevitably undercut its growth potential, Wu Xiaoqiu, vice-president of the Renmin University of China, said at the Beijing International Financial Security Forum 2019, on Monday.

"[China's currency] the yuan hasn't made a noticeable progress in its liberalization process. The opening-up level of the financial market is limited. Foreign investors only account for 2 percent transactions in the China's capital market," Wu said.

Financial opening-up is one of the China's focuses in the next stage of its opening-up, which should not be halted due to a fear of incurring external risks. China should expedite the process to liberalize its currency and make it more compatible with the international financial center, Wu said.

Foreign financial services institutions will be permitted to establish branches or independently run banks in China. The yuan's liberalization will be reformed and China's financial market will be opened up to overseas investors, Wu said.

"Financial opening-up is a major measure to build upon China's financial competitiveness and eliminate financial risks, but its precondition is that financial infrastructure must be built up," said Wu.

However, the transmission of international financial risks to China's market should be closely watched, Wu said.

Posted in: ECONOMY

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