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China seeks ways of stimulating economy

China seeks ways of stimulating economy

(23 January 2006 – China) China’s central bank wants to set up a national system for making small non cash payments to help stimulate the economy. Only four in every thousand people have an international credit card in China and cash is still overwhelmingly the dominant form of payment. The central bank views this cash centric behaviour as hindering growth.

The central bank is trying to establish national and regional centres for non cash payments such as cheque and bank drafts, for both consumers and businesses.

In further news, China plans to grow foreign participation in its domestic stock and bond markets, beefing up the qualified foreign institutional investor scheme (QFII), which allows foreign investment in its financial markets.

The QFII system, launched in 2003, allowed banks, mutual funds, insurance companies and securities firms to buy Chinese stocks and bonds.

The initiative could be extended to include trust firms, pension funds, charity funds, endowment funds and government investment firms.
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