It was emphasized yesterday by Governor of the People's Bank of
China Zhou Xianochuan that the country would continue
developing and opening up its financial markets.
"We'll continue our efforts to develop our financial market and
widen it gradually during the development," Zhou said at the
Sino-French Financial Forum in Beijing. He said China had made
progress in opening up its financial sector.
Zhou explained that by the end of June 71 overseas lenders had
set up 214 branches in China and were conducting corporate renminbi
business in 25 cities. A total of 26 overseas financial
institutions had taken a share in 18 Chinese banks with their
combined investment being US$17.9 billion.
And 23 foreign-invested fund management joint ventures and eight
foreign-invested brokerages had been established by the end of
June. Also 42 overseas institutions had been approved to invest in
China's A-share market under the qualified foreign institutional
investor program, Zhou told the forum.
The country will allow overseas lenders to deal with renminbi
retail business at the end of this year in line with its World
Trade Organization (WTO) commitment and the banking regulator is
currently working out the administrative rules for foreign
banks.
While observing its WTO commitment China would also adopt
opening and reform measures to meet the needs of market
development, Zhou said. "The government will gradually loosen its
control over the renminbi's capital account convertibility and push
for free convertibility of the yuan in a stable manner," he
explained.
Currently the country has no timetable for widening the yuan's
trading band. "It depends on whether the band is enough for the
market," Zhou said in response to questions seeking details of band
widening.
Also during yesterday's financial forum, Xiang Huaicheng, head
of the National Social Security Fund (NSSF) revealed they plan to
invest an initial 1 billion yuan (US$125 million) in the Bohai
Industrial Investment Fund.
The Bohai fund, the first such equity fund in China, was being
prepared and could be established by the end of September or later,
the China Securities Journal has reported, citing the Mayor
of Tianjin Municipality Dai Xianglong. The newspaper said the
fund's total capital would be 20 billion yuan (US$2.5 billion) with
an initial investment of 6 billion yuan (US$750 million).
"If the Bohai fund proves to be a success the NSSF will look to
expand into other such investment funds in the future," Xiang told
reporters. The fund would also start investing abroad soon with
European markets among potential targets, he said.
By the end of August, the social security fund had total assets
of 230 billion yuan (US$28.75 billion) and invested in a variety of
financial areas in domestic markets including bank deposits,
stocks, bonds and trust funds.
(China Daily September 22, 2006)