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Banking & finance
EconomyChina Economy

China’s Communist Party finance organ draws institutional road map for sector

  • A Communist Party organ designated by China to regulate the financial industry, has set out its vision for the sector in a lengthy article
  • Plans for broad reform enumerated to ensure institutions follow national objectives, set pure profit-making aside

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The Communist Party body overseeing China’s financial industry has set its expectations for the sector in a lengthy article. Photo: China News Service via Getty Images
Frank Chenin Shanghai

China’s 461-trillion-yuan (US$63.7 trillion) financial industry and its regulatory regime will be heavily prioritised in a broad economic reshuffle engendered by the country’s top leadership, with the sector remoulded to serve national objectives like sustainable growth and advancement in the global tech race.

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The Central Financial Commission (CFC), a recently established regulatory body operating under the country’s Communist Party, laid out its vision for the field in an extensive article in the Study Times – media arm of the Central Party School, the national ideological training centre.

“China has cyclical and aggregate problems in its economic development, but structural problems are the most prominent, and the main contradiction lies on the supply side,” the article read. The piece was published on Wednesday and attributed to the CFC general office, headed by Vice-Premier He Lifeng.

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“The key to promoting high-quality financial development is to deepen financial supply-side structural reform.”

China’s financial sector is expected to play an indispensable role in underwriting the country’s economic growth while defusing sources of systemic risk, like the flagging property market and debt-burdened local government financing vehicles.

The comments from the CFC follow a pronouncement from President Xi Jinping the country would become a “financial superpower” at the twice-a-decade central financial work conference in October, as well as further elaboration on what this would entail during a speech in January.

Government action soon followed, with cuts to pay in major banks, merger orders for smaller, riskier banks and a crackdown on unlicensed financial activities.
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