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China Will Allow Foreigners in Interbank Market

China Will Allow Foreigners in Interbank MarketChina Will Allow Foreigners in Interbank Market

Foreign investors can enter the Chinese market via three channels, the People’s Bank of China said on its website www.pbc.gov.cn. These are trading through the central bank; using members of China’s interbank market as agents; and applying to become a member of the market themselves.

They will be allowed to trade spot products, forwards, swaps and futures options, with no limits on the sizes of investment, PBOC said, Xinhua reported.

Granting foreign investors greater access to China’s capital markets is a long-running theme in the country’s quest to reform its economy to make it more reliant on free markets and less dependent on central planning.

The detailed rules followed the PBOC’s decision in July to permit long-term foreign investors to trade in China’s interbank market and remove limits on the size of investments.

Confidence in the Chinese economy among bankers and entrepreneurs was falling, a central bank survey showed Wednesday, as the world’s No. 2 economy showed more signs of weakness despite the government’s efforts to shore it up, Reuters reported.

The index of bankers’ confidence in the economy stood at 40.6% in the third quarter, down by 2.8 percentage points from the previous quarter, the People’s Bank of China said in its survey.

Entrepreneurs also said that they were less confident in the economy, and that companies’ profitability had further declined in the third quarter.

China’s economy grew by 7% in the second quarter, matching its performance in the first, which was the slowest pace in six years. Economic data in the third quarter pointed to further weakness, triggering concerns that China may miss its 7% growth target this year.

Bankers said in the central bank’s survey that loan demand was even weaker in the third quarter while entrepreneurs said both external and internal orders had been declining and prices of raw materials and finished goods were down.

Fewer Consumers said in the survey that home prices were too high, but at the same time, fewer of them said they planned to buy apartments in the next three months.

Financialtribune.com