By Ba Shusong　

Date: 2004/02/20

Abstract:

The foreign exchange trading center in China has not yet gained a clearly defined position in the market in perspective of the foreign exchange trading platform. In view of the competition on the market, the central bank should gradually reduce its massive, sustained and direct intervention in foreign currency market, and encourage intensified market competition instead. In view of the market participants, the medium and small financial institutions should be given more choices for trading so as to reverse their passive status and become more active players on the market. In view of the positioning of the market functions, China's foreign exchange market should transform from a demand-based market that serves the foreign exchange buying and selling position into one that serves both actual trasanctions and financial trading.