April 19, 2005
China would continue to keep the yuan exchange rate basically stable around a "reasonable" and "balanced" level, the State Council said, reiterating China's stance on foreign exchange reform.
The State Council said it would continue to gradually advance interest rate liberalization and foreign exchange rate reform, according to the document released by Xinhua.
The government also called for strengthening supervision of capital movements by setting up an "orderly" mechanism for managing capital outflows.
The document outlines the State Council's priorities for economic reform during this year, and covers subjects ranging from rural tax reform to port management.
On financial reform, the State Council highlighted the continuing work to reform State-owned banks, including listing candidates Bank of China and China Construction Bank. It said work on the reform plans for the remaining two State banks, Industrial & Commercial Bank of China and Agricultural Bank of China, would be sped up.
It also noted that the government was researching the role and functions of the policy banks, government-owned institutions that lend on noncommercial terms to support policy objectives and infrastructure projects.
On the increasingly urgent subject of capital markets reform, the State Council urged additional measures to supplement the guidelines it issued last year to boost the stock market.
In addition to the planned investor protection fund, the State Council said the government would study ways to provide direct protection to securities investors.
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