State Council meets to map China's future
(Xinhua/Shanghai Daily)Updated: 2007-01-20 14:56 China's State Council opened a two-day meeting in Beijing yesterday that will chart the nation's economic course for the next few years.
Analysts said the meeting comes as China faces several important challenges: a record trade surplus of US$177.47 billion in 2006, foreign exchange reserves that exceed US$1 trillion, stagnant domestic consumption and the possibility of a slowdown in the world economy.
Among the other pressing issues that must be addressed is the fact that China's rural banks are awash in billions of yuan in bad loans.
The government is trying to turn China's banks into modern, profitable businesses, clearing away unpaid loans and looking to foreign strategic investors for capital and expertise.
The government used state funds to recapitalize three major commercial banks in preparation for selling shares to overseas investors. Rural banks have lagged in the reform effort, however, as officials debate how to create self-sustaining institutions in poor areas that traditionally cannot support commercial lending.
The conference will also address how to coordinate financial regulation, which is divided among banking, insurance and securities agencies and whether to set up a unified national regulator.
Two previous similar meetings, held in 1997 and 2002, led to significant
policy changes.
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