{"id":1445,"date":"2014-06-04T08:22:38","date_gmt":"2014-06-04T07:22:38","guid":{"rendered":"http:\/\/blogg.lnu.se\/china-research\/?p=1445"},"modified":"2014-06-04T08:22:38","modified_gmt":"2014-06-04T07:22:38","slug":"the-art-of-reforming-financial-markets-china-still-on-the-right-track-2","status":"publish","type":"post","link":"https:\/\/blogg.lnu.se\/china-research\/?p=1445","title":{"rendered":"The Art of Reforming Financial Markets \u2013 China Still on the Right Track"},"content":{"rendered":"<p>More recently, I have been writing quite a lot about Chinese financial deregulations in articles various articles and also on this blog side \u2013 the developments so far and the needs for the future. Special challenges like the issues of timing, sequencing, reforming volumes and speed have been particularly addressed. Mistakes in these areas can be punished very sharply. (More about these challenges in my forthcoming paper \u201c<em>The Chinese Reform Process in a European Perspective\u201d<\/em> which will be referred to in our <em>Chinaresearch.se<\/em> blog that will be published in the beginning of August).<\/p>\n<p>So far, nothing directly negative can be said about the already deregulated parts of the Chinese financial markets. The least complicated areas have been or will be approached in the near future \u2013 hopefully cautiously and timely. This hope may be justified since China\u2019s political leaders do not like financial experiments. But not all experiments can be avoided in a deregulation process \u2013 and certain financial experiments can be more risky than others.<\/p>\n<p>Two weeks ago, the The Bank of Finland\u2019s Institute for Economies in Transition (BOFIT, with a most inviting front page, interesting references, news and articles) had a short message about the fascinating and opaque topic of Chinese local debt. One could read there: <em>\u201cThis week the finance ministry said it would move ahead with a plan to allow ten local administrations issue their own bonds. The ministry is allowing local governments this year to sell bonds with a combined value of up to 400 billion yuan (EUR 47 billion)\u2026\u201d<\/em><\/p>\n<p>The is a very desirable reform step \u2013 this time on an experimental basis which seems to be appropriate. But five questions should urgently be answered by relevant Chinese decision-makers when details on these ten local bond issues are about to be published :<\/p>\n<p>\u00a4   How are the interest rates for these local bonds to be set?<\/p>\n<p>\u00a4   Who will be allowed to purchase these bond issues?<\/p>\n<p>\u00a4   How will these local bonds be traded?<\/p>\n<p>\u00a4   Where are the rating agencies which can check the Chinese bond market independently?<\/p>\n<p>\u00a4   What about transparency of these local bonds?<\/p>\n<p>Even if China still has not arrived at the more critical cross-border parts of financial deregulation, more attention should be paid to transparency already from now onward. This process should be intensified without reluctance.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/image.lnu.se\/image.ashx?id=117818&amp;w=110\" alt=\"\" width=\"110\" height=\"136\" \/><\/p>\n<p><strong><em>Hubert Fromlet<\/em><\/strong><em><br \/>\n<\/em>Senior Professor of International Economics, Linnaeus University<br \/>\n<a href=\"..\/editorial-board\/\">Editorial board<\/a><\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/blogg.lnu.se\/china-research\">Back to Start Page<\/a><em><br \/>\n<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>More recently, I have been writing quite a lot about Chinese financial deregulations in articles various articles and also on this blog side \u2013 the developments so far and the needs for the future. Special challenges like the issues of timing, sequencing, reforming volumes and speed have been particularly addressed. Mistakes in these areas can [&hellip;]<\/p>\n","protected":false},"author":174,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13398],"tags":[],"class_list":["post-1445","post","type-post","status-publish","format-standard","hentry","category-china-2"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>The Art of Reforming Financial Markets \u2013 China Still on the Right Track - China Research<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/blogg.lnu.se\/china-research\/?p=1445\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"The Art of Reforming Financial Markets \u2013 China Still on the Right Track - China Research\" \/>\r\n<meta property=\"og:description\" content=\"More recently, I have been writing quite a lot about Chinese financial deregulations in articles various articles and also on this blog side \u2013 the developments so far and the needs for the future. Special challenges like the issues of timing, sequencing, reforming volumes and speed have been particularly addressed. Mistakes in these areas can [&hellip;]\" \/>\r\n<meta property=\"og:url\" content=\"https:\/\/blogg.lnu.se\/china-research\/?p=1445\" \/>\r\n<meta property=\"og:site_name\" content=\"China Research\" \/>\r\n<meta property=\"article:published_time\" content=\"2014-06-04T07:22:38+00:00\" \/>\r\n<meta property=\"og:image\" content=\"https:\/\/image.lnu.se\/image.ashx?id=117818&amp;w=110\" \/>\r\n<meta name=\"author\" content=\"Hubert Fromlet, Kalmar\" \/>\r\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\r\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Hubert Fromlet, Kalmar\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\r\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/blogg.lnu.se\/china-research\/?p=1445\",\"url\":\"https:\/\/blogg.lnu.se\/china-research\/?p=1445\",\"name\":\"The Art of Reforming Financial Markets \u2013 China Still on the Right Track - China Research\",\"isPartOf\":{\"@id\":\"https:\/\/blogg.lnu.se\/china-research\/#website\"},\"datePublished\":\"2014-06-04T07:22:38+00:00\",\"dateModified\":\"2014-06-04T07:22:38+00:00\",\"author\":{\"@id\":\"https:\/\/blogg.lnu.se\/china-research\/#\/schema\/person\/7dbc3e79d44dfa0d6bb4e1f625ad2ae5\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/blogg.lnu.se\/china-research\/?p=1445\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/blogg.lnu.se\/china-research\/#website\",\"url\":\"https:\/\/blogg.lnu.se\/china-research\/\",\"name\":\"China Research\",\"description\":\"A discussion forum on emerging markets, mainly China  \u2013                                          from a macro, micro, institutional and corporate angle.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/blogg.lnu.se\/china-research\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/blogg.lnu.se\/china-research\/#\/schema\/person\/7dbc3e79d44dfa0d6bb4e1f625ad2ae5\",\"name\":\"Hubert Fromlet, Kalmar\",\"url\":\"https:\/\/blogg.lnu.se\/china-research\/?author=174\"}]}<\/script>\r\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The Art of Reforming Financial Markets \u2013 China Still on the Right Track - China Research","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/blogg.lnu.se\/china-research\/?p=1445","og_locale":"en_US","og_type":"article","og_title":"The Art of Reforming Financial Markets \u2013 China Still on the Right Track - China Research","og_description":"More recently, I have been writing quite a lot about Chinese financial deregulations in articles various articles and also on this blog side \u2013 the developments so far and the needs for the future. 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