The opening of capital accounts should strictly follow orderly
principles, said Chinese Vice Premier Wen Jiabao in Beijing on
Friday at the ASEAN+3 High Level Seminar on the Management of
Short-Term Capital Flow and Capital Account Liberalization.
In
his speech to the seminar's opening ceremony, Wen stressed that
progress in opening capital accounts must suit the country's
economic development and be conducive to its financial stability.
The prerequisites for the prudent opening of capital accounts
should include a good climate for economic development, correct
macro-economic policies, sufficient economic power, a sound
financial system and effective financial supervision.
He
said that orderly international capital flow was an objective
requirement of modern economic development, which could help
improve the effective distribution of resources and promote global
economic growth. However, international capital flow could also
produce certain negative effects. Short-term speculative capital
flow in particular had a negative impact on financial markets and
economic performance, and could even lead to political and social
unrest.
As
a result, he said, it was important all relevant parties accepted
the need for the orderly opening of capital accounts and
effectively prevented attacks by international capital on local
financial markets.
He
described China's efforts in steadily promoting the opening of
capital accounts, as well as its interest rate and exchange rate
policies. The evidence proved that China's practices on opening
capital accounts had enabled it to successfully ward off the impact
of the Asian financial crisis, promote the country's economic
development and contribute greatly to Asian financial stability, he
pointed out.
To
encourage the gradual opening of capital accounts, regional
financial cooperation must be reinforced, he said. Southeast Asia,
with the fastest economic growth in the world and more than one
trillion US dollars in foreign exchange reserves, had great
potential for financial cooperation.
International financial institutions should also play their part in
promoting the opening of capital accounts and encouraging
international financial cooperation. The international monetary
system should be improved, and developed countries should further
open their markets to developing countries and provide sustained
and adequate capital and technological support for them, he
said.
He
stressed that drawing up scientific and sound international
standards was essential. When designing these standards, the
interests of developing countries should be considered.
( October 12, 2002)