A fundamental trend that has emerged in the world economy is the rebalancing of the global economy toward Asia, HSBC Group Chairman Stephen Green said on Tuesday.

"While the global financial crisis is still ongoing, what is clear to me is a fundamental trend that has emerged in the world economy. And that is the rebalancing of the global economy towards Asia where China is a leading power," Green said in an interview with Xinhua.

"In the long run, it is this shift that will affect the world's financial markets most profoundly," he added.

"As the Asian economies grow larger, we will see the continued development of regional and domestic capital markets, and more of the capital generated in the fast growing emerging markets will in the future stay closer to home," he said.

"This will be a positive factor for both developed economies and developing ones," Green said, "The financial system has in recent years, particularly since the aftermath of the Asian Financial Crisis of the late 1990s, grown increasingly unbalanced. There is a recognition that countries running persistent deficits must encourage consumers to save more and spend less while those countries in persistent surplus must be given capital market tools to encourage spending."

Green said he was encouraged to see that "China is actively learning from the lessons of both the failures and successes in the West and is continuing its reforms of banks and capital markets."

"Indeed, the financial crisis should not be seen as a reason for delaying reforms -- on the contrary, the transition of economic gravity from west to east means that China should seek opportunities to engage in even greater international cooperation to place the global financial system on a more stable footing," he said.

"For the successful development of an economy it's important to have a deep and liquid capital market. Banks have an extremely important and central role to play in economic development, but you also need to have an open door to capital markets. So I believe it will be in China's interest to continue to reform and develop its capital markets as well as having reformed and strengthened its banks. I think that this will be in the long-term interests of China," he added.

"Just as the current global economic crisis has many roots, solutions will require many approaches and wide participation. I believe businesses and governments need to work more closely together to tackle the effects of the global economic crisis," said Green.

"It is of enormous importance to China and to the world as a whole that China emerges from the global financial crisis stronger," he added.

HSBC was founded in China 144 years ago and has a presence in most global economies of significance. Facing the current global financial turmoil, HSBC is one of the very few banks that has not received government support.

(Xinhua News Agency March 25, 2009)