MNI 5 Things: PBOC Governor Yi: China To Open Fin Market

     BEIJING (MNI) - Following President Xi Jinping's Tuesday speech that China

will allow wider access to its markets, Yi Gang, China's newly appointed central

bank governor, told a panel that the central bank is following through with

details. The following lists highlights of PBOC's next steps of action: 

     - China will follow three principles: equal treatment and the use of its

negative list; the opening-up of the financial industry will cooperate with the

exchange rate formation mechanism reform and capital account convertibility

process; while opening up, attention will bee paid to the prevention of

financial risks, matching the ability of financial supervision with the degree

of financial openness.

     - China will remove restrictions on the percentage of foreign ownership of

banks and financial asset management companies; allow foreign banks to set up

branches in China; raise the limit of foreign shareholdings of securities, fund

management, futures and life insurance companies to 51%, and no longer impose

restrictions on them after three years. It will also no longer require that at

least one domestic shareholder of a joint-venture securities company be a

securities company.

     - The daily quota for China-Hong Kong stock interconnect will be expanded

by four times from May 1st. That is, the daily quota of Shanghai Stock Exchange

and Shenzhen Stock Exchange will be adjusted from CNY13 billion to CNY52 billion

yuan; HK stocks daily limit will be adjusted from CNY10.5 billion to CNY42

billion. Shanghai-London stock exchange linkup may be implemented this year. 

     - China will not devaluate its currency in response to the trade spat with

the U.S. PBOC will not intervene in the long-term exchange rate. China is making

efforts to stabilize its overall debt ratio and optimize leveraging structure. 

     - The interest rate differential between China and the U.S is in a

"comfortable" range. China will continue a "prudent" stance of monetary policy.

The dual-track interest rates system composed by benchmark and money market

rates will converge at a gradual pace.

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI Singapore Bureau; +65 8233 2326; email: Asia-Editor@marketnews.com