China central bank governor calls for further financial opening

BEIJING (Reuters) – China should continue to open its financial market in order to increase its global competitiveness, Shanghai Securities News reported on Monday citing an essay written by the central bank governor.

People’s Bank of China governor Yi Gang wrote in the essay that China’s financial markets are not deep or broad enough and that they needed to be better integrated with international markets. Business conditions also needed to be improved for foreign financial institution involvement.

China has pledged to further open its massive financial markets to foreign investors this year as foreign businesses have long complained that liberalization has been too narrow and on-the-ground implementation spotty.

China needs to “promote all-around opening of the financial industry…and continue to relax shareholder restrictions on foreign financial institutions,” Yi wrote, according to the newspaper.

Policymakers should “ensure previously announced opening measures are implemented as soon as possible”, Yi wrote.

Yi also said China should deepen exchange rate reform, including allowing the market to have a greater say in setting the rate, and steadily push forward capital account convertibility.

A trading link between the Shanghai and London stock exchanges should also be launched “as soon as possible”, Yi wrote.

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