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(2021) Financial Industry: Further Opening-up and Risk Prevention

During the 14th Five-Year Plan period and beyond, China will intensify efforts to further open its financial markets. As Chen Siqing, Chairman of Industrial and Commercial Bank of China said, "China's financial opening-up has entered a new stage on both a macro and micro level."

There are always risks in opening-up, and how to prevent and mitigate these risks is an eternal theme. China's economy remains stable and sound, providing a good environment for financial opening-up. However, given the volatile global economic recovery, financial risks cannot be ignored. The world economy is facing a "strong rebound, long-term recovery and desynchronized growth", with many uncertainties ahead. The complexity of the external environment requires an increasingly systematic approach to promote high-quality opening-up with a high standard of risk control.

China is now pursuing institutional opening-up. The basic requirement of institutional opening-up is to be aligned with international best practices, which inevitably brings concerns about institutional arrangements and new risks. China should therefore adopt a new perspective in its strategic considerations. Li Yang, Chairman of the National Institution for Finance and Development, believes priority should be given to three main issues: property rights protection, competitive neutrality (equal treatment of state-owned enterprises, domestic private enterprises and foreign enterprises) and state-owned enterprises (shifting from enterprise management to capital and asset management).

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