Central banker: China can be ‘bolder’ about market opening
BEIJING (AP) — China can be bolder about opening its financial markets following steps to strengthen its regulatory system and encourage use of its currency abroad, the central bank governor said Friday.
The comments by Zhou Xiaochuan, the most prominent Chinese figure in global financial markets, follow government promises last year to give foreign investors more access to its state-owned banking and securities industries.
The governor of the People’s Bank of China cited progress in developing financial regulation, improving management of financial institutions and Beijing’s efforts to promote use abroad of its tightly controlled currency, the yuan.
“Now that we have entered a new stage, we can be bolder about increasing market access and a higher degree of opening to the outside world,” said Zhou at a news conference.
Zhou gave no details, but China’s trading partners are pressing Beijing to make good on pledges to open banking and other financial industries.
Regulators promised in November to lift its limit on foreign ownership of securities, fund management and futures companies from a minority stake of 49 percent to a majority stake of 51 percent and end restrictions after three years. A similar change is to be made for life insurance companies, ending after five years.
The 70-year-old Zhou is believed to be headed for retirement following an unprecedented 15-year stint as central bank governor. He made no mention of possible retirement at Friday’s event but smiled and looked relaxed.
Zhou expressed confidence Beijing has gotten control of surging debt that prompted rating agencies last year to cut China’s government credit rating.
Borrowing rose as Beijing relied on repeated infusions of credit to support economic growth following the 2008 crisis. That pushed total debt owed by the government, companies and households above the equivalent of 270 percent of gross domestic product, close to the level of developed economies.
The ruling Communist Party has made controlling financial risk a priority this year. Regulators have tightened controls on lending and took over a major insurer last month after its heavy debt load prompted questions about its solvency.
“Fast debt growth has stabilized,” said Zhou. “Generally speaking, we have entered a stage of stabilizing and gradual lowering of the leverage ratio.”