Stock regulator says a liberalised capital market is a top priority in a country where lenders absorb too much risk
The mainland's top stock regulator told a conference in Beijing yesterday that a faster pace of capital market reform was needed to ensure the stability of the economy and society.
'The development of proper capital markets is a strategic issue and is essential to the continued growth of the economy,' China Securities Regulatory Commission (CSRC) chairman Shang Fulin said.
He said non-tradable state share reforms were on track but the country needed to speed up reforms aimed at protecting investors and improving the performance of the country's capital markets and listed companies.
'Too much risk is concentrated in the banks and China's financial system lacks flexibility,' Mr Shang said.
At present, 95 per cent of external financing comes from banks, total mainland stock market capitalisation has halved in size in the last four years and the corporate bond market is virtually non-existent.
'This situation is very unhealthy and affects not only economic but also social stability in China,' said CSRC director of research Li Qingyuan.