China Averts Economic Risks by Deepening The Financial System and Opening Up More Foreign Investment

China will deepen the financial system and improve their regulatory regime to avoid the economic risks, and opening up more to foreign investment, said Premier Li Keqiang on March, 5. The government will cover up the risks of high-quality property corporations and lessen payments of the burden of interest to local governments said by the premier on his work report to the opening of China’s parliament. 

The prime minister also added that China needs to improve financial regulations, and all involved have a responsibility to assume regional and systematic financial risks. 

Moreover, The prime minister also gave more intensity to institutional reform compared with last year. This happens after media reports on Tuesday that president Xi Jinping intended for an “intensive” and “widespread” reorganization of state-owned enterprises (SOEs) and Communist Party entities. President Xi also plans to reinvigorate the Central Finance Working Commission that indicates increased inspection in the financial sector. 

China’s main planning agency also said on Sunday to encourage economic growth, the county will progress more reforms in key areas and gain more in foreign investments. 

The National Development and Reform Commission (NDRC) said that they will undertake critical reform tasks to remove institutional barriers that could hinder development. China will develop and implement plans for another round of SOE reform, and move faster to help Chinese companies become world-class.

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China is taking the initiative to create a positive environment where SOEs show great entrepreneurial power, private companies are not afraid to pioneer new avenues, and foreign companies can freely invest. 

The NDRC also said that China will use foreign investment more wisely and accelerate China’s transformation into a “powerful trading nation.” China shows that it will further strengthen their economy with their financial reforms and financial system reforms, one of which is by opening up more foreign investment.

Source: CNA