Op Eds & Articles
Q. What advantages does Israeli business offer the Chinese economy?
I’m from the investment management sector so I can’t give you a precise answer about the trading relations between the two economies. But from my visit [in Israel], I have a strong impression that as a young-old country, Israel has a very dynamic economy and a strong potential in scientific research and other more advanced technology–related industries. I think the partnership and trading relations between the two countries is going well and relations are becoming closer and closer.
Q. Do you see room for changes and improvements in China’s regulated economy as a result of the global financial crisis?
Thanks to China’s regulatory structure, we were insulated from many of the impacts of the global financial crisis. But that doesn’t mean that we should keep this system without reforming it and improving it. I think we should improve it by introducing some small market principles into the structure. Deregulation is a way of doing this. We could keep some basic principles of regulation to protect the market from the short-term impact of capital flows. But we should increase the competitiveness and efficiency of market forces. We need to have more discussion, more financial services available to investors which current regulations do not allow. We also need more flexibility in terms of the kinds of products we want to develop.
Q. What kinds of investor strategies do you recommend to further open up the Chinese markets to globalization?
Chinese domestic bank deposits are huge. They need to increase the value of their investments and the only way of doing this is to go abroad and invest in different markets. That brings two advantages. First, the Chinese investor should diversify by investing either in Korea, Israel and Canada. Second, China’s economy is growing but it can also benefit by investing in the growth of other economies like Israel.
From the foreign investor’s point of view, I have no doubt that the Chinese economy will grow and foreign investors should be able to benefit and share in the results of China’s high economic growth. They should go in and invest in China’s best energy resources and telecommunications companies which are all listed on Hong Kong’s stock exchange.
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Dr. Yu was in Israel earlier this year for the 34th Annual Conference of the International Organization of Securities Commissions (IOSC) to address a panel on the impact of the global financial crisis on emerging markets.
This interview was conducted by the Israel-Asia Center’s Yehonathan Tommer and translated by Daniel Berman.
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