China's central bank governor calls for further financial opening up

BEIJING -- China's central bank governor has called for continued efforts to expand the opening-up of the country's financial sector in a proactive and orderly manner.

While China has made some progress in the financial opening-up, there is still room for improvement to meet the need of the sector's development, said Yi Gang, governor of the People's Bank of China, the country's central bank, in a book published to mark the 20th anniversary of Chinese Economists 50 Forum, an academic organization.

"Sectors that are more open tend to be more competitive, and less open sectors usually lag behind and accumulate more risks, as proved by the experience from China's reform and opening-up," Yi wrote in the book.

He urged further easing restrictions on foreign equity, forms of establishment, and qualification of foreign shareholders of financial institutions.

Law-making and policy-making should be more transparent to create a better environment for foreign-funded financial institutions, Yi noted.

The Shanghai-Hong Kong and Shenzhen-Hong Kong stock connect programs should be improved, and the Shanghai-London stock connect program should be launched as early as possible, he said.

More efforts are needed to deepen reform of the RMB exchange rate formation mechanism, so that the market plays a more decisive role in the exchange rate and the yuan has more flexibility in fluctuation, said the governor.

He also called for more convertibility of the yuan under the capital account and better macro-prudential regulation over cross-border capital flows, as well as an enhanced regulatory framework and stronger financial infrastructure that match the pace of financial opening-up.

"Expanding the financial opening-up will inject fresh vitality into China's financial sector, help boost its overall competitiveness, and achieve higher-level, more profound and healthier development," said Yi.