Guangming Daily recently published an article discussing issues related to China’s national financial safety, which is considered to be the core of economic safety. The article expressed concern that financial globalization has resulted in an increase in negative economic fluctuations. The author believes that there are four elements that endanger the Chinese economy: (1) hot money, or unemployed capital; (2) financial innovations that lead to instability; (3) strong pressure that results from China’s foreign exchange reserves; (4) an incomplete financial system in China’s rural areas. The article called for long-term positioning of the Chinese currency (RMB), improvements in financial market administration, and increased investment in social security systems.
Source: Guangming Daily, December 20, 2010