Finance officials seek more supervision, continued reform

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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 by keeping

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.

(L-R) Liu Yishi, chairman of the China Securities Regulatory Commission, Zhou Xiaochuan, governor of the People's Bank of China, and Guo Shuqing, chairman of the China Banking Regulatory Commission. /CGTN Photo

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.

He said that China would be on its guard against a"Minsky moment" which means a sudden collapse of asset prices after a long period of growth, and excessive optimism, usually sparked by debt or currency pressures.

“When we talk about regular financial risks, we are talking about everyday risks in the market. But aystemic risks actually have the potential to cause a financial crisis, and trigger dramatic chain reactions in the market,” Zhou said.

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 Yishi speaking with Yi Gang, deputy governor of the People's Bank of China. /CGTN Photo

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.

CGTN Photo

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’s Tracey Chang contributed to this report)