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OPINION
n April 20, the China-Singapore (Chongqing) Connectivity Initiative Financial Summit was held with the theme “charting a new path for financial center development, creating new impetus
for financial opening-up.” Against the backdrop of the international landscape undergoing continuous turmoil, worldwide inflation
running high, and global economic recovery facing severe challenges, the summit aimed to enhance China-ASEAN cooperation and improve the competitiveness and stability of the economic and financial market. He Haifeng, Chief Economist of Guotai Junan Securities Co., Ltd., shared his views on the significance of financial connectivity and the challenges it faces in the current economic situation in an interview after the opening ceremony of the summit.
What is the significance of Asian countries’ financial connectivity to global economic development and security?
He Haifeng: The International Monetary Fund (IMF) has maintained China’s 2023 growth forecast at 5.2 percent while lowering its global growth forecast to 2.8 percent. The World Bank also stressed that China’s economic momentum will boost the development of Asia, especially East Asia, and become a bright spot for global economic growth.
I believe that three major tasks are essential to enhancing financial connectivity in Asia. First, we should strengthen infrastructure including not only facilities but the connection of different financial systems.
Second, because financial institutions in different countries each have
distinct advantages, they should seek greater business cooperation. Third, application of financial technology such as digital currency and mobile payments should be promoted.
O
By Guo Xixian
The financial markets in
different countries are at different development stages, and financial institutions vary in their business focus, innovation progress, and risk-management capabilities. Therefore, the institutions should pay attention to the development situation of Asian economies and the risks brought by financial turbulence.
And because Asia’s financial market is so closely tied to the global financial market, Asian financial institutions should be careful of spillover risks and guarantee both steady development and resilience improvement while pursuing business innovation.What are the financial demands and prospects of the economies of China and Singapore?
He Haifeng: The China-Singapore relationship has been undergoing strategic development since both sides upgraded bilateral relations to an All-round High-quality Future-oriented Partnership in April 2023.
According to statistics from the first quarter of this year, ASEAN continues to be China’s largest trading partner. In the first three months, China’s
trade with ASEAN reached 1.56 trillion yuan (US$222.8 billion) with a year-on-year increase of over 16 percent, accounting for 15.8 percent of China’s total foreign trade over the same period and elevating China-ASEAN trade cooperation to new heights. With the solid support of both trade and investment, China and
Singapore will embrace a new chapter of financial market cooperation as well as the innovation and application of financial technology.
Currently, Asia is the only bright spot for a global economy that is facing severe challenges due to
multiple factors such as the pandemic and the Russia-Ukraine conflict. As China’s trade and economic exchange with ASEAN and other Asian countries boost confidence in economic
recovery, China will continue to lead and support global economic growth in 2023.
He Haifeng
Asian countries still enjoy great potential for financial connectivity despite multiple financial challenges. Financial connectivity will shore up the real economy, foster economic cooperation, and contribute greatly to the economic recovery of both Asia and the world.
How will financial institutions’ services make Asia’s financial market more risk-resilient?
He Haifeng: Financial institutions manage risk, which means they should strike a balance between
benefits and risks. Risk management is the bottom line, and innovation is the fundamental strategy. Therefore, financial institutions need to consider controlling both internal and external risks when expanding business.
Guotai Junan Securities Chief Economist He Haifeng shares his views on the significance of financial connectivity and the challenges it faces
CHINA: A BRIGHT SPOT FOR WORLD ECONOMIC GROWTH
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