Beijing, July 4, 2013
– IFC, a member of the World Bank Group, and the National Association of Financial Market Institutional Investors are hosting a workshop in Beijing today where regulators, banks, securities and law firms, and credit rating agencies discuss international best practices in securitization and its role in China’s capital markets development.
Securities products – financial instruments created by combining various financial assets – are important tools in mature capital markets and can help strengthen the development of bond markets, improve the asset-liability structure of enterprises, and promote economic growth. However, such products are still at a preliminary stage of development in China with a relatively small issuance amount.
Under the guidance of the People’s Bank of China, NAFMII launched asset-backed notes, a type of securities, in August 2012 after carefully considering factors such as risk control, disclosure requirements and investor protection. By the end of June 2013, asset-backed notes worth 9.7 billion yuan have been issued.
“China’s bond market has achieved great progress, playing a positive role in the deepening of financial reforms and the implementation of macro policies to promote national economic growth,” said Shi Wenchao, secretary general of NAFMII. “Going forward, further innovations and development of the bond market are needed to help China’s economy become even more market-oriented.”
Since its establishment in 2007, NAFMII has helped promote the development of China’s over-the-counter market. Shi said NAFMII will continue to scale-up its support for small and medium enterprise financing and work together with other financial institutions such as IFC to promote the development of China’s and global financial markets.
During the workshop titled “Capital Markets Development in China: Securitization a Key Ingredient,” representatives from the People’s Bank of China, the China Banking Regulatory Commission, the China Securities Regulatory Commission, the China Insurance Regulatory Commission, the Beijing Municipal Bureau of Financial Work, as well as embassies and diplomatic missions discussed securitization trends in China and in international financial markets. They also discussed ways to overcome legal, accounting and credit rating challenges that are hindering the growth of China’s securities market.
Jingdong Hua, IFC vice president and treasurer, said China’s economy needs a stronger and more vibrant bond market to support its sustainable growth. At the same time, he stressed that dynamic markets require dynamic regulations that support market reform and enhance risk control.
“IFC became one of the first foreign issuers of renminbi-denominated bonds and has been providing Chinese enterprises with long-term financing through the domestic foreign exchange market. NAFMII is a close partner of IFC in China and has been committed to promoting the deeper development and innovation of the domestic capital market,” Hua said. “Going forward, we need to work together to introduce more advanced market instruments and provide financing to small and medium enterprises.”
IFC has extensive experience in helping enterprises from developing countries obtain funding to improve their operations.
In the future, IFC and NAFMII will work together to establish a feasible and sustainable framework for cooperation in small and medium enterprise financing, credit guarantees and securitization, joint training and other areas, to further China’s economic development.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
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