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Chairman Liu Mingkang on Current Global Financial Situation
2008/05/05

On April 26th, Liu Mingkang, the Chairman of China Banking Regulatory Commission CBRC gave a speech at the British Museum about globalisation and international financial situation (full article), accompanied by Ambassador Fu Ying. More than 200 people, including Mr. McGregor, the director of the British Museum, Mr. Lambert, General Director of the Confederation of British Industry, representatives from Chinese Embassy, and leaders of British Petroleum attended the lecture, which was hosted by Mr. Lambert.

Liu Mingkang appreciated the opportunity to speak on the 'World Civilisation' lecture seminars. He said the current communication and interaction among countries and economies are no longer the same as the past. China embraces globalisation, because it cannot be stopped and it is unavoidable. There have been lots of different feelings and comments about the impacts and consequences of globalisation. Therefore, fully seizing the opportunities brought by globalisation has not been easy. Globalisation has brought new challenges on a global scale, such as disasters and diseases, which pose a serious threat to the world civilisation, including to China's traditions and ways of thinking.

Liu Mingkang said, the financial storm has swept all over the world. Inflation and economic slowdown have emerged in the U.S., the UK, and the EU. Unstable currencies and the employment pressure have brought fear and anxiety. A number of companies are on the edge of bankruptcy and stocks and other assets owned by people are much less valuable than before. The falling down of property's price has evolved to a global liquidity squeeze and credit loss, which has led to an overall credit crunch. What's worse is that this is not the end. Central banks of every country have provided large amount of money, which causes new moral risk.

Liu Kangming believed that three principles should be upheld in a long term. Firstly, the responsibility and obligation of risk management should be borne by the financial institutions and investors; secondly, the countries must improve their monitoring system; finally, regulatory departments should fully cooperate with each other across the border, expand information sharing to effectively prevent the crisis from further spreading. He suggested enhancing the social sense of responsibility of the leaders in financial institutions, strengthening the management, and solving the problem through the power of the market.

In conclusion, Liu Mingkang said, when large-scale public panic emerges, only rebuilding the market and increasing the transparency can sustain our civilisation. But if relevant market players are not willing to take measures, monitoring organisations must be ready to perform their duties and take firm measures to bring the market back to order.

The speech of Liu Mingkang was warmly received. He also answered questions about the economy of China, the financial situation and the development of banking sector in China.

Mr. McGregor appreciated Liu Mingkang's visit in his address. He said as the relationship between China and the UK has become stronger these years, British people are more interested in Chinese culture. The exhibition with the theme of 'Journey to the West' in British Museum has attracted 380,000 people. About 850,000 people have visited the exhibition of the 'Terracotta Warriors', which closed at the start of April, the highest record in recent years. Mr. McGregor also introduced the recent exhibition of Chinese style garden. The exhibition, focusing on protecting the eco-civilisation and promoting sustainable development, is located in the courtyard of the Museum, which is decorated by the special vegetation from the southwest of China in a typical Chinese garden style.
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