BEIJING (AFP) – China has announced a number of key economic reforms after closing a high-level conference on improving the management of its increasingly complex financial sector.
The two-day, closed-door meeting of top policy-makers chaired by Premier Wen Jiabao “formulated plans crucial to the country’s financial system over the coming few years,” said the official Xinhua news agency on Saturday.
Wen announced plans to speed up the growth of the bond market by expanding the size of corporate bonds, Xinhua said.
He also said China would steadily push forward foreign exchange rates reform and expand the use of foreign exchange reserves.
The China Development Bank, one of the country’s three policy banks, will “take the lead in starting commercial operations”, Xinhua said.
It was also announced that shareholding reform will be launched at the Agricultural Bank of China, the last of the ‘big four’ state-owned banks to move towards market listing.
The meeting is only the third of its kind since 1997, when former premier Zhu Rongji convened what was then an emergency meeting in response to the spiralling Asian financial crisis of that year.
At the last conference in 2002, policymakers set in motion the reform of China’s currency regime as well as the decision to overhaul China’s debt-strapped state banks in preparation for the opening of the sector to foreign competition last year.
“This meeting is very significant,” She Dinghuai, finance professor of Beijing University, said earlier.
“It’s very likely that very important measures on China’s financial reforms will come out after the meeting and they will become the reference point for changes in the following years.”
China’s financial system today is a mixture of archaic state-planning and newly introduced market mechanisms, which has made the management of the world’s fourth largest economy an increasingly complex affair.
Some of the major and most controversial challenges lie in the ongoing overhaul of China’s securities markets, creating a more flexible currency regime and giving more teeth to monetary policy.
“It is, in short, the place for big decisions about institutions and it thus does a lot to define the following five years,” said Stephen Green, a senior economist at Standard Chartered.