Financial Services Report China 2nd Quarter
The Economist Intelligence Unit, April 2013, Pages: 26
The forecast period is likely to be one of considerable change for China's financial services industry. Recent moves by the government, which include measures to ease restrictions in China's capital markets, suggest that it is set on its drive to internationalise the renminbi and to allow the capital account to open. Coupled with strong underlying inflationary pressures, this will encourage interest rate liberalisation.
Interest rate liberalisation will nevertheless be politically difficult. The current depression of rates and the channelling of the financial sector's lending to the state sector is an essential part of China's investment-led growth model. The government is committed to rebalancing the economy, but vested interests will oppose moves towards more market-driven interest rates. The Economist Intelligence Unit therefore expects policy lending rates to rise only modestly in 2013-17.
Low interest rates in the formal banking sector have led to an explosion in shadow financing in recent years, with customers attracted to the growing number of wealth-management products (WMPs) offered by banks. Managing the risks associated with this off-balance sheet activity while still encouraging the diversification of the financial sector will be a major regulatory challenge for the authorities in 2013-17.
Industry List: Asset managers, Financial Services, Banks, Financial Services, Financial Services, Financial Services, Insurers
Industry Codes (NAIC): 52
Industry Codes (SIC): 60
Financial Services Report China 2nd Quarter
Market data: Financial services at a glance
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Financial services report
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Financial markets and instruments
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