INVESTMENT bank J P Morgan is to play a major role helping China develop its domestic capital markets, says chief regional executive Peter Woicke. Mr Woicke, managing director of the bank and its chief executive for the Asia-Pacific region, said Morgan has made it a point in the past to participate in local capital markets. 'We have taken a stance in supporting the development of the markets in France, Italy, Germany and Spain, and we will do the same in China too in its development of a more sophisticated capital market.' Mr Woicke was appointed J P Morgan's regional executive in March, as the company began to build up the quality of its products in the area. J P Morgan now helps the mainland to manage its reserve and assists with its financing. In the longer term it sees its major role as being there to help develop a Chinese capital market. 'China will need a tremendous amount of capital to develop its infrastructure,' Mr Woicke said. 'Not all of the requirements for its infrastructure requirements will come, or can come, from the foreign markets. 'China will have to tap into savings in a more efficient way.' Mr Woicke said this could be done through the development of the local capital market. He said he could see China developing a range of debt instruments including a more liquid bond market, an option market in government bonds and a futures market in government bonds. 'As you have seen in other developing markets, these are all markets where we have participated effectively,' he said. J P Morgan has already developed good relationships with the Chinese Government, he said. However, he admitted involvement in China was not without its particular risks. Areas of concern included aspects of China's legal and political system and the issue of when the yuan would become freely convertible. Mr Woicke said investors concern with the yuan should be sorted out in due course. 'If I go by what I hear in Beijing, they are talking about making the [yuan] convertible in four years,' he said. He said even given the legal and other concerns, people were still optimistic about seeing China's conversion towards a market economy. 'People see there are market opportunities in China and say we have to be there even if it takes three, four or five years,' Mr Woicke said.