Measures might exceed international expectations: expert
China will announce more policies to open up its economy this year, which also marks the 40th anniversary of the country's reform and opening-up, and some measures may exceed the expectations of the international community, a senior Chinese official said on Wednesday at the World Economic Forum (WEF) meeting in Davos, Switzerland.
The country is prepared to "further open up in four aspects," including the financial, manufacturing and services sectors as well as strengthen intellectual property protection and expand imports, said Liu He, a member of the Political Bureau of the Communist Party of China Central Committee and director of the General Office of the Central Leading Group for Financial and Economic Affairs, who also led the Chinese delegation at the WEF meeting.
Regulators may lower or cancel restrictions on foreign investors in the manufacturing and services sector, while also adopting a model of national-treatment-plus-negative-list on their entrance, Liu said.
He also highlighted a potential tariff cut in auto imports in the next few years.
Although Liu did not elaborate on the level of opening up which may go beyond international expectations, experts predicted that the financial sector may be the first beneficiary of the new policies.
"Compared with the level of opening-up in the manufacturing and services sectors, the financial sector, specifically the domestic securities market, lags significantly behind due to central regulators' concern over potential financial risks," Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, told the Global Times on Wednesday.
The financial risks refer to the inflow of speculative foreign investors, which may deal a blow to the domestic capital market, prompting the sharp fluctuation of the yuan and eventually leading to an economic crisis, Dong said. In a similar vein, the rapid capital flight also put a strain on foreign reserves, he added.
Opening up the financial sector can be considered a test of Chinese policy-makers' supervision and policy-making ability, Dong added.
