People’s Bank of China Governor Zhou Xiaochuan (周小川) yesterday said that the nation could be more “courageous” in opening its markets, as European and US firms push for greater access to the world’s second-largest economy.
“Now that we have entered a new stage, we can be more courageous in opening our market to the outside world,” Zhou said at a news conference on the sidelines of the National People’s Congress in Beijing.
China has been considering opening to foreign financial firms since the late 1990s when it was preparing to join the WTO, Zhou said, blaming the delay on the global financial crisis, but now leaders have taken the first tentative steps, allowing foreign firms to take majority stakes in financial firms operating in China.
Photo: AP
Last year, Beijing said it would liberalize foreign access within three years, permitting companies to own as much as 51 percent of financial firms — a welcome move for a key US industry as trade tensions stir between the two nations.
People’s Bank of China Deputy Governor Yi Gang (易綱) yesterday said that the shareholding restrictions could be loosened or done away with altogether.
“This will reduce the discriminatory treatment of foreign-invested institutions, and bring about equal treatment for domestic and foreign investors,” Yi said during the news conference.
However, analysts question whether foreign firms would be able to make much headway in the nation, with Beijing having delayed the move for so long that the opening might do little to threaten the dominance of homegrown financial services firms.
Zhou also tore into cryptocurrencies such as Bitcoin, but added that China was still interested in digital units.
“We don’t like the idea of creating a speculative product that prompts people to fantasize about striking it rich overnight,” he said. “This is not a good thing.”
Last year, China launched one of the world’s strictest crackdowns on cryptocurrency trading and initial coin offerings.
At the same time, China’s digital payments ecosystem has developed faster than most of the rest of the world, with mobile payments dominating everyday transactions throughout urban centers.
The central bank has set up a digital currency research center, Zhou said, adding that such technological developments should be encouraged as long as they serve the real economy.
“In the future, traditional forms of paper money and coins may gradually fade away and some day may not exist at all,” Zhou said.
The 70-year-old Zhou is expected to step down from his post this spring after leading the central bank for 15 years.
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