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An economist of Goldman Sachs Tuesday urged China to pace up development of its capital market, which he said is still in its early state of development compared with the developed countries.
Henry Paulson, chairman and CEO of the Goldman Sachs Group, Inc., said at the ninth Fortune Forum that China needs to strengthen domestic security firms, to put priority on developing institutional markets rather than retail markets, and to have more high quality listings.
According to Paulson, the size of Japan's equity market is 3.6 trillion US dollars, and in Hong Kong, the size is 600 billion, but in the Chinese mainland, it's only 400 billion. In China's security market, there have been 1,400 companies listed, 90 percent of which are state-owned enterprises. "One of the huge problems in the market is the structural flaw," Paulson said.
One thing which is critical to China now, he said, is to move the economy from low-cost manufacturing to high-tech value-added and develop a strong private economy, and another thing is to take pressure off the banks.
In countries like the United States, two thirds of capital comes from capital markets, but in China, only 4 percent of that comes from the capital market, Paulson added.
But Paulson said he is very optimistic about China as its policy makers have got so many bright decisions in this respect.
(Xinhua)
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