Smoothing The Flow of Money.docVIP

Smoothing The Flow of Money 　　China’s investment and financing systems will be overhauled in the hope of ensuring stable economic growth， adjusting the economic structure and improving people’s livelihoods. A new guideline outlining the reform measures was issued by the Central Committee of the Communist Party of China （CPC） and the State Council on July 18. 　　“This is the first document specifying changes to the investment and financing systems to be issued by the CPC Central Committee since the reform and openingup policy was adopted some 30 years ago，”said Zhang Yong， Vice Minister of the National Development and Reform Commission （NDRC）， at a press conference on July 25. Zhang said that the document is as important as the State Council’s decision to push forward amendments to the investment system in 2004. “It will be a guiding principle on advancing supply-side reform in the investment and financing sector.” 　　By implementing the reform measures， a market structure with multiple players and a market environment for fair competition can be built. This would improve resource allocation， alleviate financing difficulties and lower financing costs for enterprises， according to Wu Qi， a research fellow at the China Minsheng Banking Corp. It would also help to create stable and efficient systems for investment and financing， easing up fiscal pressures on local governments and alleviating their debt burdens. 　　 Cutting approvals 　　China’s investment and financing systems are shifting toward market orientation as opposed to being led by the government， according to Wu. “The reform will allow the market to play a decisive role in resource allocation to further stimulate private investment and improve the efficiency of the investment and financing systems，” said Wu. 　　There are a set of procedures that all prospective investors must follow， particularly for those looking into projects in special industries. An approval-based system has been used for many years i