A senior official from the People’s Bank of China (PBOC) has highlighted four key areas for further liberalisation and opening up of the Chinese financial sector.
Speaking at the 3rd Financial Cooperation Forum on 6 November, Chen Yulu (陈雨露), PBOC deputy governor, said that “expansion of opening is the new development concept for the Chinese economy,” and that China “needed to act in four areas for deepening of financial sector opening.”
- Continue to benchmark high international standards, uphold the principles of the market, rule of law and internationalisation, and expand external opening of the financial sector. Chen stressed the need for “comprehensive, implementation of systemic opening and continual improvement of legal and regulatory systems,” as well as ensuring that China’s financial markets and infrastructure are compatible with international practices. Chen also stressed the need to “focus on financial risk prevention and supplement shortcomings in the regulatory system as soon as possible.”
- Drive internationalisation of the renminbi, and better employ the role of the government while upholding primary guidance by the market. “Internationalisation of the renminbi has always been a natural, market-driven process,” said Chen. In future this process will “further uphold market guidance, gradually remove policy restrictions, and abide by natural (process).” Financial regulatory authorities will “further improve the support systems for use of domestic currency, continually optimise policy measures for cross-border usage of the renminbi, improve renminbi cross-border settlement infrastructure, and better employ the role of currency swaps.”
- Make servicing the real economy the root, and optimise and stabilise global industry chains and supply chains. “Opening of the financial sector is not only of benefit to increases in our own competitiveness and efficiency, it is also of benefit to raising the ability to service the real economy,” said Chen. Chen pointed to the need to “maintain the stability of international industry chains and supply chains and help the world economy to recover as quickly as possible” in the wake of the COVID-19 pandemic.
- Continue to strengthen investment and financial cooperation along the Belt and Road. Chen said that China will “improve an open, market-guided investment and financial system” to “drive the high-quality development of the Belt and Road Initiative.” “We will employ financial sector opening to support the development of Belt and Road, and use development of the domestic currency bond market to mobilise even more long-term funds to participate in Belt and Road Development.”