Stabilizing China’s Finances.docVIP

Stabilizing China?s Finances A stabilized Chinese financial industry not only will be conducive to domestic development, but will also contribute to the world economy BOOMING MARKETS: Real estate is red-hot in China, and that has a big impact on the financial industry as well On October 30, the People?s Bank of China-China?s central bank-issued the Report on Chinese Financial Stability 2006. The report concluded that China?s financial reform has undergone tremendous breakthroughs, financial risks have been handled properly, and that the Chinese financial industry is generally stable. “A stabilized Chinese financial sector is good news for the world economy,” noted Liu Fuxiang, professor with University of International Business and Economics, who focuses on international finance study. The report is second of its kind. The first report was issued on November 7, 2005, concluding that the Chinese financial sector was generally stable, the same as this year. However, the first report also pointed out that Chinese financial stability was confronted with 10 challenges, including the economic growth mode and the management of financial companies. Liu said that, after the Asian financial crisis in 1997, when people marveled at the effort China had made to stabilize the Asian financial market, they were also worried about whether China could successfully deal with its own possible financial challenges after the full opening of the Chinese financial market at the end of this year. “Judging from the current situation, there is no need to worry. The Chinese financial market is capable of dealing with all odds,” Liu said. The eight-year trek From 1998, preventing and resolving financial risks has remained the focus of the Chinese financial market. Up till 2006, the Chinese financial industry has undergone fundamental changes. “In the past, the high rate of non-performing assets and low level of marketization bore many risks. The capital adequac