China pledges greater financial support for boost growth
Chinese financial authorities has pledged to offer greater financial support to stabilise economic conditions and promote high-quality development.
Pan Gongsheng, governor of central bank the People’s Bank of China (PBC), said the country has recently introduced a package of financial measures to support the economy, and these policy moves have received positive feedback from both home and abroad. He added that these policies have bolstered social confidence and contributed to the stable operation of the economy and financial markets.
And Li Yunze, head of the National Financial Regulatory Administration (NFRA), commented: “Currently, the Chinese economy is stable and making progress. The shift from old growth dynamics to new ones continues while high-quality development is making steady progress. The favourable conditions of a huge market, strong resilience, great potential and strong vitality remain unchanged.”
Li said the NFRA will step up efforts to encourage financial institutions expand financial supply, optimize resource allocation and accelerate smooth circulation of capital in an all-out effort to boost economic recovery and growth.
The officials’ statements drew positive responses from economists and academics. “Stimulus policy measures will release liquidity and reduce enterprises’ financing costs, and as a result, boost the development of the real economy,” said Xi Junyang, a professor at the Shanghai University of Finance and Economics.
Recently, the NFRA has agreed that BNP Paribas and Volkswagen Financial Services can jointly set up a property insurance company in Beijing. Prudential Financial has also received approval to establish an insurance asset management firm in Beijing, Li said.
And in September, M&G Investments, one of Europe’s leading asset managers headquartered in London, announced the launch of the M&G China Fund.
These mark some of the latest steps in China’s high-level opening-up of the country’s financial sector, analysts said.
“Opening-up is a defining feature of Chinese modernization and an important driving force behind the reform and development of China’s financial industry,” Li said.
China has been a popular destination for global investment and its doors will continue to open wider, he said, adding: “With higher standards, greater strength and more forceful measures, we strive to build a market-oriented, rule-of-law-based and internationalized business environment, and continuously promote high-level opening-up of the financial sector.”
China has implemented more than 50 financial opening up measures in recent years, including eliminating foreign ownership limitations in the banking and insurance sectors and lowering access criteria for foreign investors.
China has seen 24 large foreign banks establish branches in the country, and nearly half of the world’s top 40 insurance companies have entered the Chinese market.
Wu Qing, chairman of the China Securities Regulatory Commission (CSRC), told the Global Times website that the CSRC will firmly boost comprehensive institutional opening-up in the market, institutions and products, deepen the connectivity between domestic and overseas markets, expand enterprises’ listing overseas and encourage more foreign institutions to carry out business in China.
China SME index show positive signs
China’s Small and Medium Enterprises Development Index (SMEDI) increased 0.3 points month-on-month to 89 in October, the highest jump since the beginning of this year, according to the China Association of Small and Medium Enterprises.
The overall rate of operation for enterprises increased, with 40.2% of enterprises starting operation fully in October, up 4.4 percentage points from the previous month.
The proportion of enterprises with the rate of operation ranging from 75% to 100% registered 14.2%, up 1.4 percentage points from the previous month.
Six industries polled for the Index reported an increase, while two decreased. The six increased indexes are industrial; construction; transportation; real estate; social services; and accommodation and catering industries.
The wholesale and retail indexes, as well as for the information transmission software industry, decreased by 0.1 and 0.3 points respectively, in October.
The indexes indicate that China’s small and medium-sized enterprises are expected to operate and develop better, the market demand is recovering and the capital situation of enterprises is improving.
Meanwhile, the indexes also showed that the supply and demand of labour is rising in China, with recovering investment willingness of enterprises, the rising cost of enterprises, and the steady improvement of corporate profitability.
The SMEDI is a composite index that reflects the economic performance of small and medium-sized enterprises.
