Building Deep Capital Market – How Can China Do It?

Chinese President Xi Jinping is in a busy state of mind, exactly what China needs these days. Within the first half of the year, about 60,000 bureaucrats had been arrested in Xi’s investigations of corruption. China was almost close to a crisis in 2012 mainly because of corruption and greed.

However, changes are evident as people are getting scared now. Zhou Yongkang, former security chief is now under house arrest as a Communist Part body conducts an investigation, considering his $15 billion wealth which will be reimbursed to the state. Similar cases are emerging, bringing such illegal activities to the highest levels of attention. China’s public enemy number one now is corruption.

Xi’s anti-corruption drive is also affecting businessmen that are considered a good development for Chinese markets. Shareholders will only return to the financial markets once they are assured with a level playing field, one that is regulated and monitored.

Additionally, Xi is making efforts in liberalizing China’s financial markets, spreading securitization and deepening capital markets. China will do this through 3 ways, including municipal bonds, asset management companies, and securitized debt. All of these are designed to convert short-term loans into long-term securities which are tradable and will allow for price discovery.

About the Author

About June Harris

June was born and raised in Ligonier, a small historic town in Pennsylvania. She befriended TV cameras at an early age when she was selected to feature in a local TV series for children. Her passion for entertainment grew bigger after June was named Miss Pennsylvania at 16 years old. She was co-opted in various projects ever since and is now a strong promoter of fitness and health activities.