Center

Central bank pledges further opening in financial market

By Zhang Lu (China Daily)
Updated: 2006-09-22 08:41

"The government will gradually loosen its control over the renminbi's capital account convertibility and push for free convertibility of the yuan in a stable manner," Zhou said.

Currently the country has no timetable for widening the yuan's trading band. "It depends on whether the band is enough for the market," he said, responding to questions seeking details of the band widening.

Also during yesterday's financial forum, Xiang Huaicheng, head of the National Social Security Fund, revealed that the fund plans to invest an initial 1 billion yuan (US$125 million) in the Bohai Industrial Investment Fund.

The Bohai fund, the first such equity fund in China, is being prepared and may be established at the end of September or later, the China Securities Journal reported earlier, citing the Mayor of Tianjin Municipality Dai Xianglong.

The Chinese newspaper said the fund's total scale will be 20 billion yuan (US$2.5 billion), with an initial investment of 6 billion yuan (US$750 million).

"If the Bohai fund is proved a success, the national social security fund will look to expand into other such investment funds in the future," Xiang told reporters. The fund will also start investing abroad soon, with European markets among potential destinations, he said.

By the end of August, the social security fund had total assets of 230 billion yuan (US$28.75 billion) and had invested in a variety of financial instruments on the domestic market including bank deposits, stocks, bonds and trust funds.