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ICFC 2007 - India China Finance Conference
Mumbai - India, April 4-5 2007 |
This year India China Economic and Cultural Council (ICEC) along with Indian Banks Association (IBA) and China Society for Finance and Banking (CSFB) organized India China Finance Conference in Mumbai for two days April 4 – 5 2007. The objective of the ICFC 2007 was to understand the existing regulatory institutions and practices in the Banking, Insurance and Capital Market of China and India. |
The conference commenced with a welcome speech by Mr. P. S. Deodhar, President, ICEC. Firstly, he thanked Mr. J. N. Patil, Finance Minister of Maharashtra for agreeing at a short notice to be the chief guest. He also thanked Madam Wu, Deputy Governor, People’s Bank of China for having agreed to come to India. Mr. Deodhar mentioned that this is for the first time that luminous dignitaries from China visiting India in order to understand the financial system, how it works and also to share with us the financial system that they have in China. Mr. Deodhar explained that the work of ICEC is to bring together people of China and people of India to understand each other. He explained that this seminar is a step towards achieving our objectives of better understanding between the two countries. |
This was followed by an inaugural address by Mr. B. P. Shetty, Chairman, IBA. He stressed on the fact that together India and China make for about 40% of global human population. “Economic cooperation between India and China has increased tremendously during the last decade. The bilateral trade volume had also grown rapidly, but this cooperation has remained confined more or less to trade, many areas of bilateral cooperation, especially in finance and banking sector as well as service industries remain to be explored. This is a step in the right direction taken by the China Society for Finance and Banking, ICEC and IBA,” he explained. He applauded the initiative taken by Madam Woo in leading such a distinguished delegation consisting of about 30 delegates from over 20 financial institutions. Mr. Shetty gave an insight into the Indian economy. He highlighted the fact that the financial sector regulation and best operational practices are perhaps one of the most topical subjects today. “It is indeed appropriate that the two fastest growing economies in world share their experiences on a common platform to chalk about avenues for mutual cooperation and benefits,” he stated. Mr. Shetty concluded by giving a background of IBA. IBA proactively deals with legal, regulatory and operational issues works closely with both the regulator as well as the government for promoting healthy growth of the banking system. |
After this detailed insight into the Indian economy, Madam Wu, Deputy Governor, People’s Bank of China gave a very engrossed speech. She gave an insight into the Chinese financial sector, where it stands now, and the ongoing financial reform. According to her, markets are neither broad nor too deep. Almost three decades have passed since the adoption of reform and open-up policy, three decades of the best and most dynamic economic growth that China has ever seen and also a period of rapid expansion of financial industry. Total assets of this industry are almost 50 trillion yuan, or US$6.4 trillion at the current exchange rate, about two times of GDP. Along with expansion of financial asset, the financial system has experienced continuous improvement. |
Madam Wu stated, “In order to boost rural development, the authorities have relaxed market access of rural financial institutions, and encouraged the development of various micro-credit organizations. The objective is to build an extensive, multi-layered and sustainable rural financial system.” According to her these measures are expected to promote the harmonious development of both the urban and rural areas. |
She stressed on the fact that though the financial system has been put in place through these reforms yet the industry is dominated by the banking sector. Meanwhile, with the deepening of economic globalization and growth of Chinese economy, other countries, especially the developed ones, have moved labour-intensive industries to China. Due to widening trade surplus and massive capital inflow in recent years, the balance of payments account is under heavy pressure. In response, the Chinese government has taken a series of measures to ease the pressure. The problems in Chinese financial sector are heavy and she is therefore hopeful that they are opening their financial sector in China.
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She concluded her speech by stating that both India and China have ancient civilizations and enjoy many similarities in history, tradition and culture. Since both are populous developing countries, they are faced with many similar problems and challenges. But she was confident that exchanges between financial communities of the two countries will play a positive role in intensifying financial cooperation, promoting development of financial sectors, bilateral economic interactions and trade. Madam Wu’s speech was followed by an inaugural address by Mr. Jayant Patil, Finance Minister, Government of Maharashtra. He welcomed this professional interaction between leading personalities from the financial sectors of China and India. Mr. Patil focused on the fact that with financial liberalization and international capital flows increasing both the countries have to work together. He stated that both India and China are amazing the world of information technology. “China with its strength in IT hardware and India with its prowess in IT software. This complementary strength is an opportunity for us to cooperate more closely. In financial sector too this cooperation is vital; the financial liberalization and increasing capital flows have made it necessary for both India and China to develop and enforce compliance of international standards of financial management and policies like regulatory principles,” he explained. He thanked ICEC for bringing together this galaxy of personalities in finance from China and India. He wished success for the conference which will allow two countries to move together on the path of prosperity and deliver good and peaceful life to their people. Mr. Patil made a touching mention of Dr. Manmohan Singh, who opened up Indian economy way back in 1991. He was confident that in coming 2-3 years India will see much more liberalization in financial sector. He stressed on the fact that adopting VAT by all the states of India has given a boost to the revenue of all the states. He concluded his speech by emphasizing that in the next decade Indian economy will grow faster than any other economy around the world. |
Saying this he formally inaugurated the conference and wished them success. |
Mr. Shenoi, CEO, IBA extended the vote of thanks by reiterating the fact that both India and China are becoming global powers in terms of economy. Once again he stressed on the fact that bilateral trade between India and China is set to touch 25 billion dollars, this makes China India’s number one trade partner in north-east Asia. He explained that while the two economies are quite different from each other still India and China shall work together towards taking the strategic partnership further by increasing trade and economic cooperation with each other. With this he formally thanked Madam Woo and her delegation of senior bankers and other officials of esteemed institutions for coming to India and extending their hand of friendship. He also thanked the Hon’ble Finance Minister of the State of Maharashtra, Mr. Patil for taking time of its busy schedule and addressing the delegation. |
The inauguration was followed by speech on “Development of China Development Bank (CDB) and development of China’s policy bank reform” by Mr. Li Xinato, Deputy Director General, China Development Bank. Firstly, he gave some basic facts of China’s policy banks i.e. how they evolved their role in the financial sector. After this, Mr. Xinato talked about the development of China Development Bank. According to Mr. Xinato, CDB plays an important role in China’s economic and social development. It supports infrastructures, basic industries, pillar industries, social bottleneck sectors, development of international cooperation business etc. It also helps in promoting fiancial security and financial stability. During the support of China’s economic and social development, CDB focus on leveraging the function of financing to drive market construction, make up system shortage and market blank, and fundamentally promote China’s economic and social development. He then focused on the several issues of reform and development of China’s policy banks which needs to be strengthened. Some of the issues on which he focused were to achieve the State’s and social development objectives through marketized methods and commercial operation, solve the maturity matching of assets and liabilities, provide relatively high capital adequacy ratio and formulate specialized laws and regulations. He concluded by saying that reform is not only an opportunity but also a challenge. CDB will take the reform as an opportunity to speed up the transition to an international top and modern financial organization according to the requirement for setting up modern financial enterprise system and better serve the development of China’s economic and social development. |
This was followed by sessions dedicated to significant matters of interest to the Indian and Chinese dignitaries, focused on banking management and operations and banking regulation and supervision and Insurance. |
The concluding session on the first day was observations made by India and China. Mr. H.N. Sinor, Chief Executive, IBA made observations from the Indian side and Mr. Jiao Jimpu, Deputy Director General, Research Bureau, People’s Bank of China made the observations from the Chinese side. |
The concluding day session was started by visiting the NCDEX where corporate presentation and discussion was held. The next session was on Market Regulation. The speakers were eminent personalities from Indian and Chinese stock exchange. The conference was concluded by visiting the ICICI Bank. |
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