Foreign players in China's debt market could force long overdue change. Photo: iStock

It is necessary to expand the scale of insurance funds and capital markets amid the process of promoting supply-side reform in the financial sector, said Yang Chengzhang, chief economist at Shenwan Hongyuan Securities, Securities Times reported.

The structural reform of the financial industry should focus on solving three problems, said Yang.

The priority is to solve the shortage of long-term funds. China’s savings rate is high, but the country is short of long-term funding. We can learn from the experience of the US, however.

In the US, long-term funds to the capital market are mainly provided by the insurance industry, the largest financial sector in the country.

Second, the nation must solve the shortage of funds with high returns and high risks in the financial market. Since last year, a large number of low-rating credit bonds find it hard to issue, because investors are reluctant to buy bonds with high earnings but low credit rating.

However, in foreign countries, such bonds with high returns and high risks are good investment products if the risk compensation mechanism is working well, Yang said.

Third, China must fill in the shortage of long-term equity investment funds.

Join the Conversation

20 Comments

  1. Superb post however , I was wanting to know if you could write a litte more on this topic?
    I’d be very thankful if you could elaborate a little bit further.
    Many thanks!

  2. Hey just wanted to give you a quick heads up.
    The text in your content seem to be running off the screen in Internet explorer.
    I’m not sure if this is a formatting issue or something to do with browser compatibility but I figured I’d post
    to let you know. The style and design look great though!
    Hope you get the issue solved soon. Cheers

  3. Howdy! Do you know if they make any plugins to safeguard against hackers?
    I’m kinda paranoid about losing everything I’ve worked hard on.
    Any suggestions?

  4. Have you ever thought about adding a little bit more than just your articles?
    I mean, what you say is important and all. However think of if you added some great images or video clips to give your posts more, “pop”!
    Your content is excellent but with pics and clips, this website could definitely be one of the best in its field.
    Amazing blog!

  5. You really make it seem so easy with your presentation but I find this topic to be actually something that I think I would never understand.
    It seems too complex and extremely broad for me. I am looking forward for your next post,
    I will try to get the hang of it!

  6. hey there and thank you for your info – I’ve definitely picked up something new from right here.
    I did however expertise some technical points using this
    site, since I experienced to reload the website many times previous to I could get it to load properly.

    I had been wondering if your web host is OK? Not that I’m complaining, but slow loading instances times will very
    frequently affect your placement in google and could damage your quality
    score if ads and marketing with Adwords. Anyway I
    am adding this RSS to my email and could look out for a lot more of your respective interesting content.
    Ensure that you update this again soon.

  7. We’re a bunch of volunteers and starting a new scheme in our community.

    Your website offered us with valuable info to work on. You have performed an impressive
    activity and our entire neighborhood might be thankful to you.

  8. Hello there, just became alert to your blog through Google, and found
    that it is truly informative. I’m gonna watch out for brussels.

    I will be grateful if you continue this in future. Lots of
    people will be benefited from your writing. Cheers!

  9. Thanks for a marvelous posting! I seriously enjoyed reading it, you can be a great author.
    I will ensure that I bookmark your blog and will
    eventually come back in the foreseeable future.

    I want to encourage that you continue your great posts,
    have a nice afternoon!