Open­ing the fi­nan­cial mar­ket

ChinAfrica - - Business -

As the Belt and Road Ini­tia­tive ad­vances, fi­nan­cial in­sti­tu­tions should bet­ter serve Chi­nese busi­nesses go­ing abroad. Chi­nese Pres­i­dent Xi Jin­ping said at the con­fer­ence that de­vel­op­ing di­rect fi­nanc­ing will be pri­or­i­tized, while the in­di­rect fi­nanc­ing struc­ture will be op­ti­mized.

As for di­rect fi­nanc­ing, the es­tab­lish­ment and im­prove­ment of the stock ex­change mar­ket, Growth En­ter­prises Mar­ket board, Na­tional Eq­ui­ties Ex­change and Quo­ta­tions, re­gional eq­uity mar­ket and eq­uity crowd­fund­ing mar­ket should be pushed for­ward. Ef­forts should be scaled up to de­velop a multi-level cap­i­tal mar­ket. More ef­forts should be made to help qual­i­fied busi­nesses to fi­nance them­selves on cap­i­tal mar­kets and ex­pand their pro­por­tion and chan­nels of di­rect fi­nanc­ing. Mean­while, in­vestors’ le­git­i­mate rights and in­ter­ests should also be safe­guarded.

As for in­di­rect fi­nanc­ing, the real econ­omy and fi­nan­cial con­sumers would be bet­ter served by ac­cel­er­at­ing the strate­gic trans­for­ma­tion of ma­jor state-owned banks and de­vel­op­ing small and medium-sized banks and pri­vate fi­nan­cial in­sti­tu­tions.

Xi also said that China will fur­ther open up its fi­nan­cial mar­ket to pro­mote the steady in­ter­na­tion­al­iza­tion of the RMB and cap­i­tal ac­count con­vert­ibil­ity. To this end, more Chi­nese firms should be sup­ported and en­cour­aged to ex­pand busi­ness in over­seas mar­kets as China is ex­pand­ing the scale of pref­er­en­tial loans and credit fi­nanc­ing of­fered to de­vel­op­ing na­tions. The govern­ment should also im­prove the con­nec­tiv­ity of cap­i­tal mar­kets among par­tic­i­pat­ing na­tions of the Belt and Road Ini­tia­tive and en­cour­age the Chi­nese cap­i­tal mar­ket to co­op­er­ate with for­eign coun­ter­parts.

While en­cour­ag­ing Chi­nese fi­nan­cial in­sti­tu­tions to set up over­seas branches, China should also fa­cil­i­tate ac­tiv­i­ties of for­eign fi­nan­cial busi­nesses in China. Mech­a­nisms of Qual­i­fied For­eign In­sti­tu­tional In­vestors (QFII) and RMB QFII should be im­proved to re­lax re­stric­tions on mar­ket ac­cess for for­eign in­vestors and ex­pand Chi­nese in­vest­ment in over­seas mar­kets. Qual­i­fied Chi­nese firms should also be en­cour­aged to list abroad.

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