Others News
- Shanghai News
Date: 27-Jul-2007 Sources: (Xinhua Online)
SHANGHAI: A top central government economic adviser yesterday said pursuing free convertibility of the renminbi is key to building Shanghai into an international financial center.
Xia Bin, head of finance institute of the State Council Development Research Center, also noted the pace of opening up China's financial market should be 'moderate' to contain potential risks at a time when the country's financial system is not yet fully developed.
'China should take gradual and progressive steps to allow market forces to dictate the foreign exchange rate for the renminbi to ensure a sustainable development of the economy,' said Xia at the Global Chinese Financial Forum held in Shanghai yesterday.
Echoing Xia, Li Yongsen, an economics professor at Renmin University of China, said: 'The absence of a freely convertible currency makes it impossible for the establishment of an international financial center. We must bear in mind that currency reform is a complicated and a long-term task.'
Xia also said the authorities should consider measures to check the scale of shares held by foreign capital in China's financial institutions and the speed of foreign capital's flow into China's property market to ensure the stability of the capital market and ensure continuous economic growth.
On rising inflation, Xia said the consumer price index is not the sole barometer for the central bank to determine monetary policies. 'The central bank is expected to keep a close watch on the movements of asset prices as the focus of any action on the monetary front will continue to be on dampening liquidity growth in the capital market.'
Xia noted that efforts should also be spent on a closer cooperation between Shanghai and Hong Kong to optimize resources in the two cities and complement each other to achieve mutually beneficial development.
'There is no denial that the growing size of China's economy is lending support to the development of the financial market,' said Luo Yuding, a professor of securities and futures school with Shanghai University of Finance and Economy.
Experts at the forum highlighted the increasing importance of the commodity market in the development of China's financial market.
'The commodity market is to become China's most important market. Prices of commodities in Asia and China are expected to go much higher in the next 25 to 30 years,' said Jim Rodgers, investment guru and co-founder of Quantum Fund.
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