Chinese capital market is still underdeveloped, prime minister believes

Almaty. June 29. Silkroadnews – China undertakes various measures, including multi-level capital market development, debt restructuring facilitation in the market economy conditions, merger of bankrupt companies, to gradually reduce the level of enterprises’ financial leverage, Li Keqiang, Premier of China’s State Council, said, “People’s Daily” reports.

“As a whole the Chinese capital market is still underdeveloped, its share in the country’s financial system, the proportion of direct financing in the social financing total volume, remains low,” Li Keqiang said, having added the proportion of direct financing of enterprises makes only 15%, so it is necessary to develop the multi-level capital market.

According to him, China exerts efforts to ensure stability of its financial and capital markets, which itself is a contribution of China to the world. In addition, China is ready to develop the capital market through the financial reform. The savings’ share within GDP makes about 50%, which led to a high level of enterprises’ financial leverage.

In January-May of this year the Chinese enterprises profit increased by 6.4%.
“This shows, we have a base and a space to reduce the level of leverage of non-financial enterprises and improve its efficiency,” Li Keqiang said.