China wrapped up the third national financial work conference on
Saturday, unveiling a package of policies aimed at improving the
country's financial health.
In a keynote speech to the meeting, which is held once every
five years, Premier Wen Jiabao highlighted a number of problems
facing China's financial industry, including an accelerating
international trade imbalance, poor governance of financial
corporations and a defective rural financial system.
Wen said that China's financial industry had witnessed
historical changes since the last conference was held in 2002.
"However, quite a number of problems and contradictions still exist
... We must attach great importance (to the problems and
contradictions) and take forceful means to solve them," he
said.
The measures that the State Council agreed to include allowing
the China Development Bank, one of the nation's three policy banks,
to take the lead in opening commercial operations ahead of the
China Export and Import Bank and the Agricultural Development Bank
of China.
Following the market listings of the three "big four" banks,
namely the China Construction Bank, the Bank of China and the
Industrial and Commercial Bank of China, the meeting also finalized
the shareholding reform plan for the remaining Agricultural Bank of
China (ABC) in an effort to bolster rural economy.
Wen said that the ABC reform must be carried out in a steady
manner that would serve the financial demands of rural China.
Official figures revealed that only 60 percent of the 120
million rural households had access to bank loans. While Chinese
farmers generated only 15 percent of the country's total bank loans
and deposits, the per capita outstanding loan balance for rural
residents is less than 5,000 yuan, only 10 percent of that for
urban residents.
To remedy the situation, the meeting agreed upon a raft of
principles such as facilitating rural financial reforms, moderately
reducing the access threshold for financial institutions into the
rural market, encouraging and supporting the establishment of
diversified rural credit organizations including those engaged in
small loans and pushing forward agricultural insurance.
Professor Justin Yifu Lin of the Peking University said that the
meeting had provided "crucial thoughts for future rural financial
reforms."
He said that the next step China would take is to establish more
specific regulations.
Regarding to the rapidly expanding foreign exchange reserves
that hit US$1.06 trillion, Wen Jiabao said that China would
steadily push forward the foreign exchange rates reform and
actively explore and expand the use of the massive stockpile.
He said that China would strengthen operation and management of
foreign exchange reserves and facilitate the balance of
international payment.
While China's economy maintained a double-digit growth, the
country has seen a yawning wealth gap. The government said
financial institutions would be encouraged to grant more support to
the capital-hungry small and medium-sized enterprises,
self-innovation projects, public causes and the less developed
regions.
The State Council also agreed to facilitate the fair competition
between domestic and foreign financial institutions and advance
financial collaboration between the mainland, Hong Kong and
Macao.
David Dollar, director of the China Bureau of the World Bank,
said that the meeting came at a critical time.
China promised to further open up its financial industry after
wrapping up the five-year grace period for its WTO entry, which would help China to build a
more open and competent financial system, he said.
(Xinhua News Agency January 21, 2007)