LINE

Text:AAAPrint
Business

Deepen financial reforms to support real economy, ease reliance on leverage: official

1
2016-03-21 08:52:38Global Times Li Yan ECNS App Download

More work should be done to deepen financial reform with the aim of supporting the real economy and easing the increasing reliance of companies on leveraging, Zhou Xiaochuan, the governor of the People's Bank of China (PBOC), the central bank, said on Sunday.

In the contemporary capital market, the debt-to-GDP ratio is "too high," which has attracted much attention from the public, Zhou said during a forum on Sunday, domestic news portal qq.com reported.

"One way is to further encourage equity investment to reduce companies' reliance on debt," Zhou noted, according to the report.

A nation's saving rate is usually around 20 percent to 30 percent of GDP, while Chinese households socked away more than 35 percent in 2015, said Zhou.

High saving rates give enterprises access to financing methods such as bond issues, which may lead to high corporate liabilities, he noted.

Meanwhile, the nation's equity market has been developing since 1990, which is a relatively short period, and raising funds through investing in equity is a less developed channel.

High liabilities are likely to generate risks, Zhou said, noting that one way to fend off those risks is to further boost equity market development.

During the 13th Five-Year Plan (2016-20), China should focus on reforms to diversify financial services, improve its monetary mechanism, strengthen financial regulations and ensure the capital market will support the development of the real economy, Zhou said.

Zhou also addressed the issue of managing a floating exchange rate, qq.com reported on Sunday. Besides considering market supply and demand, "the PBC will probably refer to the [IMF's Special Drawing Rights] in the future to manage the exchange rate in a reasonable range," he said.

  

Related news

MorePhoto

Most popular in 24h

MoreTop news

MoreVideo

News
Politics
Business
Society
Culture
Military
Sci-tech
Entertainment
Sports
Odd
Features
Biz
Economy
Travel
Travel News
Travel Types
Events
Food
Hotel
Bar & Club
Architecture
Gallery
Photo
CNS Photo
Video
Video
Learning Chinese
Learn About China
Social Chinese
Business Chinese
Buzz Words
Bilingual
Resources
ECNS Wire
Special Coverage
Infographics
Voices
LINE
Back to top Links | About Us | Jobs | Contact Us | Privacy Policy
Copyright ©1999-2018 Chinanews.com. All rights reserved.
Reproduction in whole or in part without permission is prohibited.