Finance officials call for greater supervision, continued reform

A Financial Sector Delegation meeting was held as part of the 19th National Congress of the Communist Party of China on Thursday, with high-level officials calling for further reform, more opening up and strengthened supervision of the financial system.

Fighting risk, strengthening supervision, continuing reform

China Banking Regulatory Commission chairman Guo Shuqing emphasized that measures put in place this year to better supervise the financial system, particularly in the banking and financial services sector, have had little effect on the real economy.

Measures have been put in place to counteract risks, with Guo highlighting shadow banking, the property bubble and local government debt as particular areas demanding attention.

Zhou Xiaochuan, governor of the People’s Bank of China, added that more attention should be paid to the levels of household debt. While household debt levels would not be considered high when compared with the rest of the world, Zhou said more people were paying attention to household leveraging because of fast growth in recent years.

Zhou also emphasized the importance of supply-side reforms in managing high levels of corporate debt and improving weak direct financing.

Liu Shiyu, chairman of the China Securities Regulatory Commission, said that a strategy to combat major risks should be laid down, including the prevention of risks in finance and local debt levels.

Liu called for a continuation of reforms with the aim of building an internationally competitive multi-level capital market system as soon as possible.

More emphasis on opening up

Guo said that over the past five years, there had been steady development of foreign banks in China, but their market share in the Chinese banking sector had fallen.

Guo said this drop was not conducive to boosting competition or improving the sector’s structure, meaning that there should be greater emphasis on reforming and opening up the banking sector.

Zhou also spoke about China’s currency, and said that the trading range of the yuan exchange rate was not a key issue at the moment, with the width of the yuan’s exchange rate having little effect on market supply and demand.

Zhou also said that there would be further opening up in China’s financial market, building on recent measures that have connected Shanghai and Shenzhen to Hong Kong.

(CGTN)