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Financing Tangible Growth
Cover Stories Series 2012> Financing Tangible Growth
UPDATED: January 17, 2012 NO. 3 JANUARY 19, 2012
Eight Measures for China's Financial Development

- Providing better financial services to facilitate economic and social development

The financial industry must strengthen its service functions and market presence, tighten support to weak links of the economy, including agriculture and small and micro-sized enterprises. It is also imperative to enhance financial support to the country's economic rebalancing, energy conservation and emission reductions, environmental protection, as well as indigenous innovation.

- Deepening financial reforms

Financial institutions must improve corporate governance, build an effective internal incentive mechanism and push forward diversification of their shareholding systems. Efforts will also be made to eliminate monopolies, allow private capital into financial service sector and encourage them to participate in shareholding reform of banks, securities firms and insurers. The policy financial institutions should adhere to policy-related businesses and the China Development Bank will continue with the commercialization reform.

- Tightening financial supervision and fending off risks

The banks are supposed to build a complete risk management system, while the securities industry must improve market systems to protect the interests of investors. It is also necessary to enhance supervision over the compensation capabilities of insurance companies.

- Preventing and reducing risks of local government debts

China's overall local government debts remain controllable, but it is still imperative to streamline the financing vehicles, control the overall scale of the local government debts and build an effective early-warning mechanism.

- Strengthening capital and insurance market building and promoting coordinated financial market development

China will promote the healthy development of stock and futures markets, crack down on illegal financial trading platforms, regulate the bond markets and foster healthy insurance markets.

- Improving financial macro-controls

China will enhance coordination between monetary and fiscal policies, as well as supervision and industry policies to ensure economic and financial stability. It will further improve the yuan exchange rate regime.

- Further opening up the financial sector to the outside world

China will gradually push forward convertibility of the yuan under capital accounts and better manage the foreign exchange reserves. It will also deepen the mainland's financial cooperation with Hong Kong, Macao and Taiwan, help consolidate Hong Kong's status as an international financial center, and speed up development of Shanghai as an international financial center. The country will also take a more active part in global financial management.

- Reinforcing financial infrastructure construction and improving the market environment

The country plans to further improve financial rules and relevant laws, build a unified credit record platform and improve financial infrastructures in fields like registration, payment and clearance.

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