China vows steady opening of financial sector
BEIJING: China will steadily reform and further open its financial sector while putting “equal emphasis” on preventing risks through regulation and supervision, the new central bank governor said on Sunday.
In his first public speech since becoming central bank chief last week, Yi Gang told the China Development Forum in Beijing that opening up leads to progress, while closure points to backwardness.
“History has proved that areas that are more open are more competitive, and areas that are less open are less competitive and see risks accumulating (as a result),” Yi said in a wide-ranging speech that touched on issues from support for rural communities to potential risks in the financial system.
Us-educated Yi, 60, a protege of respected predecessor Zhou Xiaochuan, is widely seen as a safe pair of hands, ensuring policy continuity as China persists with its crackdown on risks and a debt build-up in its increasingly complex financial system.
While Yi is not regarded a political heavyweight like his former boss Zhou, he is expected to play a supporting but important role on China’s new economic team helmed by Vice Premier Liu He.
The team includes the recently-anointed banking and insurance regulatory chief Guo Shuqing, who sources said will soon become the central bank’s Communist Party chief.
Yi’s speech put much emphasis on risk control, and was in line with the government’s narrative that China’s opening up will proceed but at a pace it sets.
Commerce Minister Zhong Shan, in a recent meeting with former US Treasury Secretary Henry Paulson, said China’s opening is self-initiated and will not be pressured by any “big stick” from other countries.
“We will put equal emphasis on the opening up of the financial sector and prevention of financial risks,” Yi said. “The opening up of the financial sector must be accompanied by the development of financial regulation.”
REFORM PROMISES: President Xi Jinping, in the twice-in-a-decade Communist Party congress in October, vowed that China will deepen economic and financial reforms and further open its markets to foreign investors.
A month later, China said it will lift the ceiling on foreign equity ownership in joint-venture firms involved in the futures, securities and funds markets to 51 per cent from 49 per cent, though no timetable was set. China also said ownership limits in many financial sectors will be dismantled after three years.