China’s financial shake-up shows policymakers’ growing focus on stability, risk

THE sweeping overhaul of China’s financial regulatory system unveiled on Tuesday (Mar 7) underscores the government’s growing focus on maintaining financial stability and curbing risk, analysts said.

The massive shake-up, which will include setting up a national financial regulator that oversees all parts of the financial sector apart from securities, was unveiled in a proposal submitted by the State Council to the annual meeting of the National People’s Congress, the country’s top legislature.

The new financial regulatory body, which will be directly under the State Council, will absorb the banking and insurance watchdog and take over some functions from the People’s Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC), including supervision of financial holding companies, consumer protection, and investor protection. The securities regulator will be elevated to a government agency directly under the State Council.