Guangdong Province, an economic engine in south China, is poised to upgrade its financial sector and capital market to enable them keep pace with the province's economic growth.

The latest step towards the upgrading was the establishment of a financial service office under the provincial government on Tuesday. The center will provide better services for financial enterprises in the province and assist local branches of the People's Bank of China, the China Banking Regulatory Commission and the China Insurance Regulatory Commission in their regulation over the industry.

The move is also part of measures Guangdong is taking to help promote the cross-border cooperation with eight other provinces and Hong Kong and Macao in the Pan-Pearl River Delta (PPRD) region, according to Zhong Yangsheng, vice governor of the province.

To speed up the construction of a diversified financial regime,the innovation of financial instruments and creation of a financial corridor connecting Guangdong with Hong Kong and Macao would be conducive to the formation of the PPRD cooperation mechanism, Zhong added.

Since China started its reform and opening-up drive more than two decades ago, the financial sector has undergone fast development in Guangdong, yet faces a line of challenges, including higher exposure to risks, lower efficiency and poorer assets quality in comparison with its peers in east China's Jiangsu, Zhejiang and Shandong provinces and Shanghai municipality.

By yearend 2003, deposits outstanding, denominated in both Chinese and foreign currencies, amounted to 2.96 trillion yuan (US$356.63 billion) in Guangdong, and the province's loans outstanding to 2.01 trillion yuan (US$242.17 billion), or 13.5 percent and 12.0 percent respectively of the nation's total.

Last year more than 100 billion yuan (US$12.01 billion) was supplied in cash in the province, or 42.5 percent of the nation's total.
 
(Xinhua News Agency June 10, 2004)