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China emits fresh signals on building a financial powerhouse-Xinhua


BEIJING, Jan. 19 (Xinhua) — China has sent fresh and strong signals on building itself into a financial powerhouse as part of its efforts to pursue high-quality development of the financial sector.

The central financial work conference held last October called for accelerating the building of a nation with a strong financial sector, which elevates the importance of financial work to a higher strategic level.

Chinese President Xi Jinping elaborated on this goal, explaining how China will achieve it at the opening of a study session attended by principal officials from the provincial and ministerial levels on Tuesday.

Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, noted that a country with a strong financial sector should have a strong economic foundation, and lead the world in economy, technology and comprehensive national strength.

Such a nation should also have a series of key core financial elements, such as a strong currency, a strong central bank, strong financial institutions, strong international financial centers, strong financial supervision, and a high-caliber team of financial talents, he said.

WHY THESE ELEMENTS MATTER

A strong currency is regarded as the foundation of finance. With the steady advancement of the yuan’s internationalization in recent years, the Chinese currency has seen its share in global trade finance rise to the second spot.

In the meantime, the yuan still lags behind major international currencies in terms of shares in global payment, investment, finance and reserves, said Ren Tao, a researcher at the National Institution for Finance and Development.

A modern central bank system is also imperative to underpin the country’s shift to high-quality development, providing solid support for economic upgrading while warding off severe inflation or deflation as well as systemic financial risks.

China’s financial institutions have seen increased strength and influence, with more than 4,000 banking institutions in total and five lenders assessed as global systemically important banks. Yet their development remains uneven and their competitiveness needs to be strengthened.

In addition, the country needs more competitive international financial centers with greater global influence. It is also important to enhance the security of financial development with scientific and effective oversight, and cultivate a strong talent pool with the professionalism needed to navigate the complexity of finance.

HOW TO BUILD FINANCIAL STRENGTH

To strengthen China’s financial capabilities, Xi has urged accelerating the building of a modern financial system with Chinese characteristics.

He called for efforts in six aspects, namely, financial regulation, markets, institutions, oversight, products and services, and infrastructure, which are all targeted at providing high-quality financial services for economic and social development.

Xi also demanded cultivating a financial culture with Chinese characteristics, pointing out the ways forward for improving the country’s financial soft power.

China has the world’s largest banking system and the second-largest insurance, stock and bond markets. Nevertheless, the quality and efficiency of the country’s financial services for the real economy need to be further improved.

China must make significant efforts in the areas of technology finance, green finance, inclusive finance, pension finance, and digital finance, according to the central financial work conference.

This, in essence, requires pooling more financial resources in the medium and long term to effectively support strategically important fields of development, said Lian Ping, president of China Chief Economist Forum.

Stressing promoting high-level financial opening up, Xi called for better transparency, stability and predictability in opening-up policies.

“High-level opening up will help attract more foreign-funded financial institutions and long-term capital to engage in business in China, which can improve the financial sector’s global competitiveness and its capability of serving the real economy,” said Wang Qing, an analyst at Golden Credit Rating. 



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