China will press ahead with its opening-up and relax restrictions on foreign
investors in the financial services sector, the People's Bank of China said
yesterday.
It "will, in a modest manner, allow foreign investors to take
more stakes in the financial services sector and relax the restrictions on their
business scope and origin," the central bank said in its second China Financial
Stability Report. But it did not elaborate in the report.
The report
comes only a month away from the country fully opening the banking sector in
line with its World Trade Organization commitment.
It would also
"determinedly push forward the reform of State-owned commercial banks to improve
their ownership structure, corporate governance and internal control mechanisms,
provided that the State remains (their) absolute majority shareholder," the
central bank said.
It also vowed yesterday to beef up its control on
major financial institutions to safeguard national financial
security.
According to the report, China has made breakthroughs in
financial reform and dealt well with financial risks, with the overall financial
system stable last year.
"The rapid yet stable national economy has laid
a sound foundation for achieving financial stability," the central bank
said.
But it warned that international imbalances and swings in oil and
other resource prices may impact the country's financial stability.
And
the intensifying competition and potential risks that may arise from financial
innovation may also pose risks to China's financial stability, the central bank
added.
Direct financing is still developing at a sluggish pace in the
country as enterprises rely heavily on bank loans. This "is concentrating on
banks some of the risks that should have been shouldered by financial markets,"
the central bank said.
This financial structure is detrimental to the
operations of banks and to the prevention of systematic financial risks, it
said. The central bank also said yesterday it would accelerate the establishment
of a deposit insurance mechanism.
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