In a show of commitment to a more open market, China’s central bank governor on Tuesday criticized protectionism in the country’s financial sector just hours ahead of MSCI’s decision on whether to include Chinese mainland shares to its benchmark emerging markets index.
“From the experience of many countries, including our own, protections will lead to laziness and weakness… protectionism will lead to weak competitiveness and will hurt the industry’s development, and (make for) unhealthy and unstable markets and institutions,” People’s Bank of China Governor Zhou Xiaochuan said at an annual forum in Shanghai, Reuters reported.
Such talk out of China is set to be well received by foreign firms hoping for a greater chance at that growing market.
“The central bank governor was certainly saying all the right things there. That’s what market participants want to hear, that China is opening up, that capital controls are easing and that it’s an easier place to do business,” said Sat Duhra, portfolio manager at Janus Henderson Investors.
Yet while Zhou’s comments may indicate the Chinese government’s commitment to financial sector liberalization, foreign companies still face a range of restrictions on investment and business in China.