China needs to change its laws to allow local governments and qualified companies to issue bonds, Zhou Daojiong, former China Securities Regulatory Commission (CSRC) chairman, said yesterday.

"China needs to develop various bonds to finance its ambitious development plans for the country's massive hinterland," said Zhou at yesterday's Funds World China 2003 in Shanghai, the nation's financial hub.

Zhou now serves as chairman of the Finance Committee under the Pacific Economic Co-operation Council (PEEC) China Committee.

Funds World China, organized by US-based Terrapinn, is a leading fund management forum held annually in Shanghai.

Currently, most of the bonds in China are issued by the central government and relevant financial institutions, with very few by companies.

And local authorities have no rights to issue bonds.

"That's far from good enough," Zhou said.

Local governments in western regions, for example, can issue 10-year bonds for certain industrial and infrastructure construction projects.

But scientific feasibility studies and legislation are essential to support such bonds, he added.

Zhou also said private and overseas companies should take part in the country's bonds market, as well as the whole capital market.

Echoing Zhou's remarks, China Construction Bank (CCB) president Zhang Enzhao said yesterday that local commercial banks "are also capable and to some degree better equipped" to participate in qualified foreign institutional investors (QFII) custody services.

Compared with foreign banks, local banks have abundant experience in domestic securities custody, advanced RMB fund settlement systems and a profound understanding of Chinese laws and regulations.

CCB, one of the country's "Big Four" State-owned commercial banks, is currently the custodian for HSBC's QFII businesses in China, providing custody services such as application, clearing, settlement, accounting, investment monitoring and consulting, according to Zhang. "So far, all these operations have been running well," he said.

Close

Today's Top News		Top Business News
+N. Korea agrees to talks, US 'encouraged' ( 2003-10-31) +China, EU sign agreement on Galileo ( 2003-10-31) +Developers held over demolitions ( 2003-10-31) +Bush vows to spur Sino-US military ties ( 2003-10-31) +Shanghai on track for Expo 2010 ( 2003-10-31)		+Guangzhou fair sets records ( 2003-10-31) +Energy reform gains strength ( 2003-10-31) +Local buyers drive up sales of Audi A6 ( 2003-10-31) +Full steam ahead on energy reform ( 2003-10-31) +Sohu.com completes uplink with Walt Disney group ( 2003-10-31)