China is joining hands with its neighboring countries to develop the bond market in Asia, an official with China's central bank said in Shanghai Sunday.

China has actively initiated and participated in the regional financial cooperation, said He Jianxiong, deputy director general of the International Department of the People's Bank of China, at the ongoing Asia-Pacific Business Forum, a side event of the 60th session of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

As a major method to develop the Asian bond market, the Asian Bond Fund (ABF) was launched in Chiang Mai, Thailand, in June, 2003 by the Association of Southeast Asian Nations (ASEAN), and China, Japan and the Republic of Korea (ROK) (10+3).

The second phase of the ABF has been approved to pave the way for investments in local currency-denominated Asian bonds after the successful launch of the first-phase one billion-US dollar ABF.

Financial experts have said the establishment of the Asian bond market indicates that the regional financial cooperation has entered into the phase of preventing monetary crisis from the headstream.

In addition to participating in the regional financial cooperation, China has taken a series of domestic financial policies, including moderating credit growth to hold down price level and stabilizing its currency exchange rate.

"China's financial policy could benefit the region as a whole," He Jianxiong said.

(Xinhua News Agency April 26, 2004)