Mark Austen: China Should Reduce Dependency on Income from Exports

Mark Austen: China Should Reduce Dependency on Income from Exports 

Mark Austen, Chief Executive Officer of the Asia Securities Industry & Financial Markets Association (ASIFMA), has asked China to focus on market reforms and not on retaliating to the US firms in order to avoid constantly surging trade tensions.

The lobby group ASIFMA has also asked China to speed up the process of opportunities in its financial markets to entice foreign investments in order to help a dampening economy.

The reason why China needs to focus on market reforms and welcome foreign investments is because the ongoing continuous trade-war can adversely affect sectors of rare-earth and investment markets. Also, China is taking a longer time than required to furnish operating licenses to the US rating agency Fitch Ratings and the US banking card payment firms Visa and Mastercard.  

Austen believes that the reason China needs to augment its transformation, while focusing towards an economy depended upon utilisation. He believes that China should reduce its income from exports and increase its transformation, so that “there’s a real domestic imperative for China to develop its own capital markets and allow foreign investment to flow in and foreign firms to operate in China to help with that development.”

Previously, the International Monetary Fund had claimed that while the ever-increasing trade war will not cause global recession, it might depreciate the global growth in 2020 by 0.5 percent amounting to US$455 billion.

Despite the suggestions of Mark Austen, Chinese authorities have claimed that they will retaliate with a tougher response if US imposes more tariffs. However, they have also promised to continue working towards the betterment of its financial sector.

Guo Shuqing, head of the China Banking and Insurance Regulatory Commission (CBIRC), said “We will further open China’s banking, insurance, securities and trust sectors. We especially welcome experienced global asset managers, along with domestic players, to raise yuan capital, and invest in yuan-denominated securities markets.”

According to ASIFMA, China should repose its capital controls, even though the trade war prompts worry about capital outflows and Yuan depreciation.

During an interview, Mark Austen said that as China has been extremely careful about the investment outflow, “With the escalation of the trade tensions, they will become even more sensitive in the short term”.

While the trade war doesn’t seem to end anywhere in the near future, it certainly is one of the causes for the plunge in the Asian stock markets. While Mark Austen is continuously asking China to improve opportunities for foreign investment in the country, it is yet to be seen how China will act on this suggestion.

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