China’s financial market is undergoing a tremendous transformation, which will generate more opportunities for the Chinese economy in the years to come, Deutsche Bank co-Chief Executive Officer John Cryan said.
Cryan spoke to Xinhua during his first trip to China after assuming the role of co-CEO in July 2015.
He was in the country to take a firsthand look at the bank’s local operation.
“China is a strategic market for Deutsche Bank” and there are “growth opportunities in every one of (the bank’s) key business areas here”, he said.
“When I think of China, I think of a person in their 30s running a marathon,” he said. “Since the 1980s China has made great strides toward rapid economic growth and globalization. It’s amazing what China has achieved in such a short period, and the journey is far from over.”
According to Cryan, there is room for the further development of China’s economy, especially in the services and consumer industries.
In parallel, “a strong, flexible and globally connected financial system would be able to support (China’s) economic growth in more complex ways”, he noted.
The banker said he thinks the Chinese government has been doing a fairly good job in managing a difficult transition process in which the old drivers of growth－infrastructure and property investment and exports－are giving way to consumption-led growth.
“With the adoption of prudent and supportive monetary and fiscal policies, the (Chinese) authorities have ensured that growth has slowed down gradually, consumer prices have been broadly stable and rising employment has been sustained,” Cryan said.
“Services have taken over from manufacturing as the main source of growth and employment, the private sector is expanding and median household income growth in China continues to rise at an enviable pace, more than 8 percent in real terms last year,” he said.
“I see some similarities in the Chinese transition process,” Cryan added. “First, the shift from old to new growth drivers has a geographic dimension. It is a great responsibility and hugely complicated to forge a macroeconomic policy for an increasingly heterogeneous economy,” he said.
“Second, often lost among the news about restructuring pain is the fact that China－like Deutsche Bank’s home country Germany－is making great strides in advancing technology in manufacturing and services.
“This will help China and Germany to forge ahead economically in the years ahead. When current expectations stabilize, companies will increase their investment and global trade will regain its momentum. This will help Europe and China,” Cryan added.
With regard to the performance of the renminbi, Cryan said he thinks the currency has moved to the center stage in the global arena, creating many promising trade and investment opportunities.
“The ongoing stability of the renminbi exchange rate against the established basket has significantly improved the credibility of the newer framework of the managed floating renminbi exchange rate against a trade-weighted basket,” he said.
“More importantly, it has eased the fear of renminbi devaluation and helped stabilize market expectations about the renminbi exchange rate,” the banker said.