Amid slowdown, China to push ahead with reforms

Written by Reuters | Shanghai | Updated: Jun 30 2012, 07:46am hrs
Chinas top financial policymakers expressed determination on Friday to push on with their campaign to reform and rebalance the worlds second-largest economy even as growth cools.

Manufacturing activity in Chinas second-biggest economy has slowed for the past eight months, prompting expectations that regulators could dramatically loosen monetary and fiscal policies to spur the economy, as they did during the last global downturn. However, top officials who spoke at a financial forum in Shanghai indicated they will maintain the current prudent policy mix, while continuing with reform.

We will forcefully push ahead financial reforms and innovations to promote cohesive development in the economy and the financial industry, central bank governor Zhou Xiaochuan said.

The Peoples Bank of China will stick to the reforms in interest rates, currency rate and cross-border use of yuan, he added.

China will also expand the financing channels available to banks, allowing them to raise funds overseas and retain higher levels of profit, Shang Fulin, chairman of the China Banking Regulatory Commission, said at the same forum.

The banking regulator is also studying the possibility of letting banks issue preferred shares, he added.