To sustain the growth of Chinese economy, especially in the context of “New Normal,” China needs a much stronger financial system with an effective resource allocation and risk diversification mechanism. The key elements to build this system include internationalizing RMB, building an international financial center, and making Chinese capital market one of the most important global asset allocation destinations. Focusing on the capital market, there is still a huge gap between China’s ideal capital market and the current market. To bridge this gap, the Chinese government needs to reconfigure the reform, open up the stock and bond market, and change the regulations and related laws.

Professor WU Xiaoqiu is a renowned economist and financial securities expert in China. He currently serves as Vice President of Renmin University of China, Executive Deputy Dean of Graduate School, and Director of Finance and Securities Institute in China.