China needs to step up reform of its financial system by steering it toward more sound and orderly development, and accelerating the construction of international financial centers, two former senior officials said on Wednesday.
They made the remarks at a seminar held by the China Institute for Innovation and Development Strategy in Beijing.
Wang Hongzhang, former chairman of China Construction Bank, said the country must give better play to the role of the central bank in macro regulation and systemic risk prevention.
“For example, the People’s Bank of China should strengthen the monitoring, inspection and disposal of liquidity risks of depository institutions,” said Wang.
Meanwhile, the monetary policy should be further optimized so as to ensure it works well with other key economic policies such as fiscal and industrial policies.
Wang also said the country needs to build a more reasonably structured financial market system by increasing the proportion of direct financing, which is currently only around 20 percent.
“Direct financing is more flexible and efficient… It could better match the needs of science and technology-based enterprises and thereby contribute to the cultivation of new quality productive forces,” said Wang.
In addition, efforts were stressed to accelerate the formulation of the financial law and regulations, so as to foster a more effective financial governance system.
Such move will not only help clarify the responsibilities of the government, the market and regulators, but also protect the rights and interests of depositors, policyholders and investors, Wang added.
Wang Yongli, former vice-president of Bank of China, said accelerating the construction of international financial centers is also a critical part of China’s efforts to deepen financial reform.
Specifically, Wang said the trade rules and management systems of China’s financial markets need to be widely recognized by the international community and the internationalization of the renminbi should continue to be advanced.