China to Intensify Measures to Open Up its Financial Market
China is planning to intensify measures and open up it financial market, the plan came with the inclusion of the renminbi in the International Monetary Fund basket of currencies with special drawing rights. As China promises a greater use of the renminbi in the cross border transactions and a better convertibility of capital accounts. Cross border lending will also be eased in pilot fee trade zones around China.
In a statement issued that in the efforts to push forward financial reforms in a risk controlled environment, several more trials is introduced elsewhere. In Taizhou in Zhejiang province where small and medium enterprises are being developed, direct financing of both type of enterprises from onshore and offshore are encouraged by the government using specialized financial institutions. The Chinese government welcomes the International Monetary Fund’s decision on the renminbi showing that the country’s reform and the international community recognizes opening up and the decision pushes further the internationalization of the renminbi stressing that the government will continues with macroeconomic management.
The IMF decided to include the renminbi in the reserve currencies basket that have the third highest weighting following the US dollar and Euro. China keeps the floating exchange rate system under management to maintain a reasonable and balanced level. Just after the inclusion of the Chinese currency in the special drawing basket, China is likely to see huge amounts of capital inflows in renminbi assets for the medium to long term. During the meet the government also approved a drafted amendment to the Family Planning Law that clarifies all the families in China to have a second child. The draft was submitted to the nations top legislature for it approval before the years ends.