Global financial issues -- China, India for common approach

Ulhas Joglekar ulhasj at
Sun Dec 26 03:39:23 MST 1999

Financial Daily
from THE HINDU group of publications on
Thursday, December 23, 1999

Global financial issues -- China, India for common approach

Our Bureau
NEW DELHI, Dec. 22
A HIGH-level Chinese delegation led by the First Vice-Minister of Finance,
Mr. Lou Jiwei, today called on the Finance Minister, Mr. Yashwant Sinha, and
discussed issues of bilateral cooperation including adoption of common
approach by the two countries on international financial and monetary
An officials statement issued today states that the visiting delegation also
held detailed discussions with senior officials of the Ministry with special
focus on the budget making process in India.
The seven-member Chinese delegation, which is on a seven-day tour of the
country, is scheduled to hold discussions with officials of the Reserve Bank
of India and Maharashtra Government, besides meeting heads of leading
financial institutions in Mumbai during the next few days.
Later, addressing a luncheon meeting organised by the Confederation of
Indian Industry (CII), the visiting dignitary said that China will continue
with its present deficit financing policy for the next two-three years in
order to combat deflation.
Mr. Jiwei said that deficit financing is a part of an international package
to revive the Chinese economy, and an appropriate measure as the economy
required a boost.
He further said that while India could obviously not sustain itself on
deficit financing, the criteria for deciding whether this fiscal instrument
should be used must be economic consideration, not financial reserves.
Mr. Jiwei said that the Chinese Government is actively pursuing measures
like BOT to attract private and foreign investment, adding that Government
infrastructure bonds were also very important and had raised 100 billions
Renminbi Yuan. He said that these bonds had a floating coupon rate that
varied with the interest rate, with the coupon rate being slightly higher
than the deposit rate besides which the dividends were tax-free.
He said that though Chinese foreign exchange reserves were expected to touch
$155 billions at the end of this year, China was also being cautious as it
had $140 billions worth of foreign debt.
Pic.: Mr. Lou Jiwei, the First Vice-Minister in-charge of Finance,
Government of China, calling on Mr. Yashwant Sinha, Finance Minister, at his
chamber in the Capital on Wednesday.

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