Economy Apr 10

More reforms planned for finance markets, agriculture

China’s commercial banks are allowed to participate in treasury bond futures business from Friday

by Nadeem Xu
China to improve stock market operations

(ATF) – China will increase its efforts to deepen reform and the opening-up of its stock markets and remove institutional barriers that hinder the free flow of factors to lay a solid foundation for the high-quality development and the building of a modernised economic system, according to a document issued by the Communist Party of China (CPC) Central Committee and the State Council on Thursday.

The government  will promote market-based allocation of factors of production including land, labor and capital, while accelerating the development of the market of technology and data factors, it said.

It will improve basic mechanisms on the stock market, accelerate the development of the bond market, increase the supply of effective financial services and expand financial opening-up.

More industrial reforms

The country will also push forward the reform of the rural land expropriation system, adjust policies on industrial land use and optimise its land management mechanism, according to a government document.

The document underlined better protection and application of intellectual property rights (IPRs) and support for the marketization of independent IPRs in fields such as major equipment and key new materials while encouraging the integrated development of factors of technology and capital.

Efforts will be made to nurture new industries, businesses and models of the digital economy and support the utilization of data in fields including agriculture, industry, transport, education and urban management.

Market-oriented pricing mechanisms and trading platforms of production factors should be further optimized, according to the document.

Bond futures 

From Friday, China’s commercial banks will be allowed to participate in treasury bond futures business and use financial tools to manage their interest rate risks. The new development will help enhance the resilience and vitality of financial markets and prevent and resolve market risks.

On Friday, Industrial and Commercial Bank of China, Bank of China and Bank of Communications participated in the country’s treasury bond futures markets.

In the past, treasury bond futures investors of China Financial Futures Exchange were brokerages and fund and asset management companies, instead of commercial banks.