Yiwu releases financial reform plan

The small commodity trading hub of Yiwu in East China's Zhejiang Province announced its financial reform plans Tuesday following a batch of reforms by local governments since March 2012.

The reform covers seven measures including improving foreign currencies management, innovating cross-border yuan settlement and encouraging private capital to support real economies, local government of Yiwu, a city well known for its small item trade and exports, said in an statement published on cs.com under China Securities Journal newspaper.

The long-awaited reform plan "will be helpful in promoting the local small commodity trade," Zhou Dewen, president of the Wenzhou Small and Medium-sized Enterprises Development Association, told the Global Times Tuesday.

He suggested that Yiwu's local government make "bold attempts" to reform foreign currencies management and cross-border yuan settlement, considering the city's advanced position in foreign trade.

But Zhou said there is "no big breakthrough" in Yiwu's financial reform plan compared with the reform measures in Wenzhou, also in Zhejiang Province.

The State Council, the country's cabinet, approved the establishment of a financial reform zone in Wenzhou in March 2012, and released 12 reform measures including legalizing private lending and encouraging private capital to invest overseas directly.

After over one year, Wenzhou's city government has only achieved some improvement in the legalization of private lending, having encountered stalemates in other sectors, according to Zhou.

The State Council also approved the establishment of a financial reform plan for formalizing private lending and borrowing, and boosting credit access for small and medium-sized enterprises (SMEs) in Quanzhou, a city in East China's Fujian Province in December 2012.

On Monday, the government of Central China's Hubei Province also handed its financial reform and innovation plan for Wuhan, the provincial capital, to the State Council for approval.

The financial reform in Wuhan will focus on areas including the development of small and medium-size financial institutions and the construction of a regional financial market system.

Concerning the local governments' enthusiasm for financial reforms, Zhang Taowei,

an associate professor at the School of Economics and Management of Tsinghua University, told the Global Times Tuesday that "the local governments still need support from the central government."

The reform plan by Yiwu supports qualified private enterprises in getting listed on the Beijing-based National Equities Exchange and Quotations (NEEQ) and regional equity transaction markets.

But Zhang said it is difficult to push forward this measure as getting listed on the NEEQ must be approved by State regulators such as the China Securities Regulatory Commission.