China's role crucial for global financial reform

By Zhang Xin (chinadaily.com.cn)
Updated: 2009-06-17 16:34

The world is recovering in a gradual manner from the financial crisis and China's engagement in the discussion of reforming the global financial institutions and regulatory system is crucial, Lord Adair Turner, Chairman of the Financial Services Authority in the UK told China Daily Wednesday.

"It is very important after the huge financial crisis that we are building up as much cooperation as possible between regulatory authorities across the world … it is important that we learn lessons from each other about the way that we regulate our banking systems and discuss common approaches to regulation because some of these approaches are based on a common global basis", Lord Turner said.

He said cooperation with China is "particularly significant" as China has become a member of the global Financial Stability Board (FSB), which is a crucial body to which the G20 has looked to developing new approaches to regulation to increase the stability of the global financial system.

"China will attend the first meeting of the expanded FSB in Switzerland at the end of next week and part of my purpose of a 3-day visit here is to build links with people who will be my colleagues on the FSB board", Turner said.

He said China should become and will become one of the major nations involved in the discussion about the future global financial regulation, noting China's strong national self-interest in ensuring the global financial system is based on sound principles and regulations and governance procedures which ensure financial stability.

"Hence, China and the UK would deepen the dialogue on a whole series of regulatory issues, deepen the dialogue about things to do with mutual recognition to allow listing of Chinese companies in London and UK companies' listings in Shanghai," he noted, labeling the May 11 China-UK Financial and Economic Dialogue in London "a useful exchange of views" on financial and economic situations in both countries and the world, which is spawning a set of commitments on issues of common interest.

"There is something Britain could see as more likely to have Chinese companies listed in London over time as the mutual financial cooperation is up to enable companies to build a global profile," Turner said, noting he would, vice versa, like to see global UK companies being able to have a listing in Shanghai as well as with the London stock exchange.

HK, No Tax Haven

Lord Turner also said "no" to claims of including Hong Kong on the blacklist of tax havens.

"I don't think we have seen Hong Kong being covered by blacklisting," he said.

"Obviously, it is important we have common standards of not only the regulatory quality about which there is no doubt at all in relation to Hong Kong, but also agreements on how we deal with tax," he said.

He suggested the steady improvement over time of those standards and the assurance that all the parts of the world meet those standards -- a priority seen at the G20.

"We certainly don't believe in Hong Kong's on any of the blacklists", he refuted such claims.

During the G20 summit in London recently, French President Nicolas Sarkozy insisted on including China's Hong Kong and Macao on the blacklist of tax havens and received an immediate objection from Beijing.