As a firm practitioner of financial opening, China has made proposals to widen its opening amid closer regional financial cooperation in Asia to promote sustainable economic recovery of the region.
Zhou Liang, vice chairman of the China Banking and Insurance Regulatory Commission, recently spoke at the Asian Financial Summit Forum about the importance and measures to strengthen regional financial cooperation, as well as China’s future step to deepen financial opening .
– Why is closer regional financial cooperation necessary in Asia?
As economic cooperation in Asia entered a new phase, the region has seen growth in trade and investment, adjustments of production layout and transformation and integration of industrial and supply chains.
All these advancements require financial support, necessitating the establishment of a regional network of high quality financial services.
Meanwhile, the rapid upgrade of new forms and products of the financial sector has changed the modes of operation and types of risk in the financial market, forcing Asian countries to optimize the regional regulatory system through concerted efforts.
As cross-border capital flows are subject to financial risks, Asian economies, with different recovery rates, different financial market maturities and different capacities to absorb external shocks, need to step up cooperation to ensure their financial security and stability.
– How to strengthen regional financial cooperation?
To promote healthy industrial chain operation, financial institutions should be encouraged to actively participate in cross-border businesses, including supply chain and trade finance, and mergers and acquisitions, in order to break bottlenecks in the regional economic cycle.
Financial instruments should be fully deployed in the areas of risk hedging and mitigation, while resource and risk sharing should be improved to increase the resilience of the industrial chain.
Faced with the challenge of climate change, Asian economies must support low-carbon and green development by expanding green credit, insurance, bonds and funds; accelerate the integration of the regional carbon finance market and increase investment in the green economy.
To promote shared development, more financial resources need to be pooled to support the global fight against COVID-19, accelerate digital transformation with the help of fintech, and improve the inclusiveness and accessibility of financial services.
In terms of policy, Asian economies are expected to cooperate with each other in establishing regional financial rules and standards and mechanisms for the prevention and management of cross-border financial risks.
– What is China’s two-way financial opening all about?
In the next phase, China will vigorously and cautiously promote the two-way opening of the financial sector by introducing high-quality foreign investment into the country while supporting Chinese institutions to invest abroad.
Adhering to the principle of equal treatment of domestic and foreign investment, the country will actively introduce foreign institutions with professional strengths into the Chinese market to create a more open and win-win financial system.
It will also steadily encourage Chinese institutions to expand overseas businesses, optimize business layout in the countries along the Belt and Road, and actively participate in international financial cooperation.
China is committed to the full implementation of the national pre-establishment treatment plus a negative list system, and to build a market-oriented, law-based and internationalized business environment.