China to fast-track financial reforms

China will hasten reforms of Agricultural Bank of China, the weakest of the nation's four biggest state-owned banks, and China Development Bank, the Chinese Cabinet said yesterday.
China will also fine-tune its regulatory oversight of cross-industry financial services and of financial holding companies, the State Council said in a statement, citing this year's economic reform goal, posted on the central government's Website yesterday.

Supervision will be helmed by the central bank, finance ministry and its banking, securities and insurance regulators, the statement said. The Chinese government will also promote the "stable and healthy" development of its capital markets, according to the statement.

The 2008 economic reform plan by the National Development and Reform Commission, approved by the State Council, also includes China's mission to deepen reform of the yuan's exchange rate mechanism and improve the currency's flexibility, the statement said. The monitoring system for cross-border capital flows will be improved.

The Agricultural Bank of China said it would invest in rural banks, financial leasing firms and insurers in the countryside to expand services to the nation's more than 700 million farmers.

The state-owned bank's efforts to restructure into a joint-stock company are "progressing smoothly," the bank's Vice President Zhang Yun told Bloomberg News.

China Development Bank, which funds the country's public-works projects, is expanding overseas and branching into markets such as leasing to pave the way for becoming a commercially oriented firm.