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Business / Economy

Regulator says China can maintain financial stability

By Li Xiang (China Daily) Updated: 2016-03-21 11:11

Regulator says China can maintain financial stability

Wang Zhaoxing, vice-chairman of the China Banking Regulatory Commission. [Photo provided to China Daily]

"We have to reduce the debt burden of companies while preventing moral hazards and ensuring the asset safety of the banks," he said.

Wu Xiaoling, deputy director of the Financial and Economic Affairs Committee of the National People's Congress Standing Committee, said China should develop a multitiered capital market to expand direct financing and reduce the corporate debt ratio.

A former vice-governor of the People's Bank of China, Wu also expressed concerns about the aggressive quantitative easing policies adopted by other central banks, which she said could lead to a new credit boom and bust.

"I am more worried about the excess reliance on monetary policy globally, which could help accumulate financial risks," she said.

Wu said negative interest rates, as seen in the eurozone and Japan, will "offer no help to the real economy".

"It will only spur speculative trading for short-term profits," she said, adding that the only solution will come from accelerating structural reforms, adjusting the supply and demand structure and boosting the real economy through technology and innovation.

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