A presentation entitled “Economic Crisis and Challenges: China’s Experience and Possibility of Applying to Vietnam” with the major participation of Hong Kong Government’s Lead Economist KC Kwok was organized on January 15th in Hanoi.

The presentation was also attended by Deputy Chairman of the National Financial Supervision Committee of Viet Nam Le Xuan Nghia.

Mr. KC Kwok gave lecture on the themes of the global financial crisis, China’s banking reform, and analysis of China’s reform strategies.

According to Mr. Kwok, global economic prospects keep turning worse and consumer and investors confidence weakening. Moreover, global financial institutions are likely to suffer more losses while “deleveraging” continues and economic performance deteriorates.

Commenting on China’s banking reform, Mr. Kwok said that the country is seeing significant progress in the financial health of many Chinese banks and the Chinese banking system; partly helped by the exceptionally strong economic performance in recent years. Moreover, with gradual liberalization of banking services and foreign exchange control regime, the range of banking services has been expanding fast. However, management quality, risk management capabilities and culture, and quality of the services of the Chinese banks have still a lot to catch up.

For analysis of China’s reform strategies, Mr. Kwok mentioned three broad stages of China’s reform from centrally planned to socialist market economy, including: redistribution of administrative power (before 1978), incremental reform without tackling head-on the hard core issues of the state-run economy (from 1979 to 1994) and holistic market reform (from 1994 to now.)

At the presentation, Mr. Kwok also commented about Vietnam’s exports. He said that exports to the country will suffer from weaker overseas demand, more protectionist pressures and subsidies and less FDI.

Some lessons for Vietnam were also given in the presentation. Mr. Kwok emphasized: “While liberalization is the source of economic dynamism, putting together with the right macroeconomic, monetary, and regulatory systems is necessary for an efficient functioning of the market economy. Moreover, administrative, budgetary and taxation reforms are important to encourage the right government behavior and pursuing structural reform is the longer-term solution to short term macroeconomic problems.” (CPV)