Opportunities between China and Japan

More cooperative opportunities will arise in capital markets in China and Japan as ties between the two countries strengthen due to improving economic co-development, financial leaders have said.

"The securities industry cooperation between the two countries can be improved in many fields and requires both sides to make an effort to promote deeper reforms based on a expected stable and long-term dialogue platform," Li Jiange, chairman of China International Capital Co, told China Daily at the Eighth Beijing-Tokyo Forum.

"More capital from Japan is welcome in China to enjoy the fruits of Chinese economic growth."

Following Monday's talks, economists from both countries agreed China-Japan economic and trade relations have a great opportunity at a time when the European sovereign debt crisis is threatening the world's economic growth.

Bank of Japan Deputy Governor Hirohide Yamaguchi said as the global financial system is under the risk of turbulence, capital market stabilization in Asia is much more important.

"It needs further regional cooperation to maintain the value of national assets as well as broaden mutual investments," Yamaguchi said.

President of the China Institute for Reform and Development Chi Fulin said Japanese securities companies entered the Chinese market about 30 years ago, "but Japanese capital participated less in China's fast growing economy in the past decades".

As of June 22 the value of shares transacted in the Tokyo Stock Exchange had reached $3.4 trillion and accounted for 7.3 percent of the total share value in all the world's exchanges, according to Li, the CICC chairman.

However, by the end of June there were only two Chinese companies listed on the Tokyo Stock Exchange.

Securities companies from China and Japan can cooperate through joint ventures, as the shareholding for foreign capital in Chinese securities institutions has been lifted to 49 percent, up from 33 percent in May, Li said.

He said companies from both sides can design creative financial instruments together, such as the exchange-traded funds, which can improve mutual investments in capital markets.

The direct conversion between renminbi and Japanese yen started on June 1. In the past month, foreign exchange trading between the two currencies has been more active than expected, increasing market demand for the relative financial derivatives, including renminbi futures and options, analysts said.

Toshiro Mutoh, chairman of Daiwa Institute of Research and former vice-president of the Bank of Japan, said the Japanese government is working with Chinese experts to expand capital transactions and investment channels for renminbi.

"In the near future, the mutual investment mechanism in the bond market is expected to be built, providing opportunities for investors to inject money into corporate bonds and support economic growth," he said.

chenjia1@chinadaily.com.cn