Report urges fast reform of financial system

Non-bank lenders to be allowed to compete with traditional players

China's economic rebalancing will rely on market-oriented http://www.143561.com - http://www.143561.com/ - vacuum extruder and in-depth reform of its financial systems to attract investment into more efficient private sectors, according to a report.

The National School of Development at Peking University said on Thursday legalizing and regulating a credit scheme outside the main banking system, http://143561.com/products/Roller-crusher.html - vacuum extruder , as well as http://www.143561.com - clay brick making machine liberalizing interest rate fluctuation should be at the core of any reform.

"The main orientation should be encouraging non-bank lending businesses to compete with traditional banks, to provide market-based capital pricing for more small and medium-sized enterprises," its report said.

"A market-oriented interest rate regime is seen as a premise to free cross-border http://www.143561.com - hollow brick making machine capital flows, and the relocation of http://www.154562.com - http://www.154562.com/products/Color-brick.html - concrete brick machine resources between industrial sectors and service businesses."

In addition, a more competitive credit system will curb any exacerbation of non-performing loans, it said.

Zhu Haibin, the chief Chinese http://www.154562.com - http://www.154562.com/products/Color-brick.html - cement block machine economist with JPMorgan Chase, wrote in a recent research note that rapid expansion of financing outside the banking system has raised market concern since the fourth quarter of last year, fueling a faster growth rate in the all-system financing aggregate than for bank loans.

He said the recently released policy to control ", http://143561.com/products/Subblank-machine.html - clay brick machine ;non-standard" credit products http://www.154562.com - http://www.154562.com - concrete block machine was likely to reduce potential default risks while moderating economic recovery.

Song Ligang, a senior researcher with Australian National University, said that financing provided by big banks to State-owned enterprises has fostered excessive production http://www.154562.com - http://www.154562.com/products/Color-brick.html - hollow block machine capacity and intensified the imbalance of China's economic development.

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