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China at the Economic Financial Crossroads: Experts Tell Forum Beijing Should Continue to Liberalise and Market Players Should Respect the Rules

CAMRI concludes its 7th Wee Cho Yaw Singapore-China Finance and Banking Forum in Beijing

19 June 2015 - Experts have told a forum organised by theNational University of Singapore (NUS) Business School that China should push ahead with the liberalisation of its markets and currency, the Renminbi (RMB). However, they said, the rules have to be clear and players should respect the regulations.

 

At this year’s Wee Cho Yaw Singapore-China Finance and Banking Forum, experts discussed the economic implications of Beijing’s policies for banks and financial institutions in Asia, particularly China and Singapore, as well as the outlook for the RMB. The Forum was also told that trading in China shares recently accounted for 61% of the global figure in a single day’s trading data. 

 

This year’s theme is ‘China at the Financial Economic Crossroads: The Critical Next Steps’. The Forum, moderated by Professor Anthony Neoh, Dean’s Visiting Professor at NUS Business School and former Chief Adviser, China Securities Regulatory Commission (CSRC), featured experts Dr Huang Haizhou, Managing Director, China International Capital Corporation (CICC); Mrs Lim Hwee Hua, Executive Director, Tembusu Partners, and a former Cabinet Minister in Singapore; Madam Sau Kwan, President of E Fund Management; and Professor Gao Xiqing, the former President and Chief Investment Officer of the China Investment Corporation (CIC).

 

“The liberalisation of the markets and asset prices like interest rates and currency value was a key topic in the Forum. All the speakers told us to open the door but to make the players respect the fundamentals,” said Bernard Yeung, Dean of NUS Business School and Stephen Riady Distinguished Professor. He added: “Reforms are clearly needed to improve the efficiency of the capital market which is vital for China’s sustainable growth. We need leaders with wisdom and a caring heart, as well as positive international engagement; sustainable growth of China’s economy is critical for its citizens and the rest of the world.”

 

Madam Kwan provided insights into the development of the fund management industry highlighting the exceptional 1500% growth for mutual funds in China over the past decade. In terms of reforms in China, she commented that, “Reforms are moving in the right direction but China needs to do more, and at a faster speed. My personal wish-list includes the setting-up of a pilot programme of the Free Trade Zone for the asset management sector in Shanghai, and the removal of the quota system for QFII and QDII in the near future.”  

 

Another panellist, Mrs Lim, spoke broadly on the policy impact of financial reforms, saying: “Whatever reforms China undertakes, these have a significant impact on Asia and the rest of the world, so getting them right is important. These include introducing the move towards more market forces at play, having well-established and well-capitalised banks with the right leadership, and allowing bad institutions to fail as any mature market would.”

 

Madam Wu Xiaoling, a former Deputy Governor of the People’s Bank of China (PBoC) delivered a keynote speech, with opening remarks by Mr Wee Ee Cheong, Deputy Chairman and CEO of United Overseas Bank (UOB).

“China has made incredible strides on the financial and economic fronts in recent years with respect to capital market reforms and connectivity, in improving its financial systems and mechanisms, the internationalisation of its RMB, and in fighting corruption and improving governance,” said Professor Joseph Cherian, Director of NUS Business School’s Centre for Asset Management Research and Investments (CAMRI).

“Many of the financial and political economic reforms that are taking place in China are informed using best practice from around the world, including Singapore. In fact, Singapore has been collaborating with China on its economic development since the 1970s. But as our eminent panellists and speakers noted, it’s still a work-in-progress. There are economic, political and legal challenges relating to financial reforms, with issues needing top level attention, along with the prospects for real change in both form and substance,” Professor Cherian elaborated.

Held annually in Singapore or China, the Forum is organised by CAMRI with the aim of fostering a deeper understanding among industry professionals and scholars of the challenges and opportunities in the finance sectors of China and Singapore.

The Wee Cho Yaw Singapore-China Finance and Banking Forum was established in 2008 with a generous donation from the then-Chairman of UOB, Dr Wee Cho Yaw, and his family. The inaugural Forum was held in Beijing in August 2010 in conjunction with the 20th anniversary celebration of diplomatic relations between Singapore and China.

Mr Wee Ee Cheong, Deputy Chairman and CEO of UOB, said, “China is integrating actively with the rest of the world. Geographical proximity, historical relations, overall trade, investment and tourism connections mean that Singapore and Southeast Asia will feature strategically in China’s progress to become the world’s largest economy. As a Singapore-headquartered bank with one of the strongest Southeast Asian networks and franchises, UOB welcomes the economic and business opportunities that China’s new economic and financial market policies bring to the region.”

Along with UOB, the Forum’s other main strategic partner is the Sun Yefang Economic  Science Foundation.

This year, in conjunction with the 50th anniversary of NUS Business School, the half-day Forum featured a panel discussion and a question-and-answer session, attended by more than 200 industry professionals.

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