China to raise yuan flexibility after WTO entry: PBoC's Dai

SHANGHAI (AFX-ASIA) - China will increase the flexibility of the yuan exchange rate after the country's accession to the World Trade Organisation, but will continue to implement and improve the current exchange rate system, People's Bank of China governor Dai Xianglong said, according to the Financial News.    The report, which became available in Shanghai today, cited Dai as saying that China has an optimistic attitude towards the domestic and international financial situation.    Since the domestic economic situation is good, there is a strong basis for the stability of the yuan.    After the country joins the WTO, some changes will take place in terms of trade and investment, and there may be major changes to the country's balance of payments.    Consequently, the exchange rate will be made more flexible, but the country will maintain and improve its existing exchange rate system, he said.    Dai also said foreign banks will gradually gain access to the domestic market after WTO entry, and the pressure this places on domestic banks will be beneficial in terms of forcing the banking system to reform.    However, competition for talent will become very fierce, he said.    China will implement several measures aimed at strengthening the competitive power of domestic banks, including speeding up the commercialisation of state banks and supporting the stable development of small and mid-sized banks, he said.    It will continue to improve the system of financial supervision and cultivate more talent in the financial industry, he said. 

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