China and the United States have agreed to beef up their
cooperation in the financial service sector during the third
strategic economic dialogue that ended at a resort outside Beijing
Thursday.
China pledged to examine its policy on foreign participation in
domestic securities firms and come up with recommendations on new
ceilings of foreign ownership, according to a joint fact sheet
circulated after the dialogue.
A similar study on foreign ownership of Chinese banks is already
going on and will be completed by the end of 2008. New
recommendations shall also be given to maximum foreign
ownership.
Qualified foreign-invested companies, including banks, will be
allowed to issue RMB denominated stocks and bonds.
Shortly before the dialogue, China raised the quota for
qualified foreign institutional investors, which allow foreign
mutual funds to invest in China's domestic stock market, from 10
billion U.S. dollars to 30 billion U.S. dollars.
In return, the U.S. government said it remains committed to
applying national treatment to Chinese banks and broker-dealers
seeking to open branches or register and operate in the United
States.
The United States will apply "the same prudential standards to
all applications by foreign banks to establish branches or
subsidiaries or to acquire stakes in existing U.S. baking
institutions," the joint fact sheet said.
U.S. Treasury Secretary Henry Paulson called this progress
"moderate", affirming that opening China's financial markets to
foreign competition strengthens the financial backbone of the
Chinese economy. "It's critical to China's goals of spreading the
benefits of growth to all Chinese people," he said.
Playing down the disputes on the speed of the yuan's
appreciation, Paulson said "we didn't spend a lot of time talking
about how fast is fast." A statement of the U.S. delegation
recognized China's progress in its gradual yuan appreciation
policy: "The RMB has appreciated 12.2 percent since July 2005, and
in the past year the annual pace of appreciation has accelerated
from 3.4 percent in 2006 to 6.1 percent in 2007 year to date."
Chinese Vice Commerce Minister Chen Deming made it clear
Wednesday that China was not against yuan appreciation, but
stressing that a rapid appreciation of China's currency would hurt
its economy, which would not be positive for the world.
Chen, instead, expressed concern over the continued depreciation
of the U.S. dollar, which he said would "drive up oil and gold
prices and reduce the assets of the countries or companies that
hold the currency."
(Xinhua News Agency December 14, 2007)
