China’s opening up helped it dodge financial crisis – banking chief

Updated 2017-06-21 16:26:56 CGTN

China's increasingly market-oriented and healthy financial institutions will help it ward off financial crisis, the governor of the country's central bank said on Tuesday, as he addressed the opening of the annual Lujiazui Forum in Shanghai.

Kicking off the two-day financial summit, Zhou Xiaochuan elaborated on China's opening up policy and its growing involvement in global competition and cooperation.

Here are some of the highlights of Zhou's speech:

Internationalization of Chinese financial institutions

More and more financial institutions have benefited from "going out" and adapted to competition with international participants, especially in the arenas of risk control, pricing and work against money laundering.

Although many initially argued in favor of protecting the financial sector until domestic players were strong, protectionism can only compromise the competitiveness of the sector, in Zhou's view.

"Protectionism will lead to laziness and weakness, which will end up damaging the industry's development. The more our market remains closed to the outside, the less competition we have and the less attention is paid to increasing market standards," he said.

Zhou claimed that there are now five financial institutions from China among the leading players in the global system, without naming the five.

Despite the competitive nature of China's financial service sector, Zhou is not satisfied and he called for further opening up.

Int'l yuan-clearing system launches in Shanghai

The RMB Cross-border Inter-bank payment System (CIPS) has recently launched in Shanghai after operating elsewhere in China since 2015. Zhou described the CIPS as a key part of China's efforts of internationalizing the currency.

The system was initialized to end the monopoly that China's yuan clearing banks enjoy and gives foreign banks a share of the mushrooming yuan clearing business.

With its operation, Zhou said Shanghai is confident of being a financial center well matched to the Chinese economy and the global status of RMB by the year 2020.

Belt & Road Initiative offers opportunities

The Belt and Road Initiatives is likely to see many opportunities for new types of financial cooperation between China and the world.

The initiative will serve as a development space for financial institutions' overseas layout, facilitating trade, investment and capital operations, Zhou said.

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