Bigger role of managing financial risk

Claudine Rigal
Juillet 17, 2017

President Xi Jinping said on Monday China will accelerate market opening and clear administrative hurdles to boost foreign investment, while stepping up financial regulation to fend off risks.

Three tasks were highlighted at the meeting - making the financial sector better serve the real economy, containing risks and deepening reforms.

Despite concerns of the fallout from risks in the financial system, analysts say stability is the word of the day ahead of a once-every-five-years Communist Party Congress.

Serving the real economy is the bounden duty and goal of the financial sector and the fundamental way to guard against financial risks, Xi pointed out.

Guarding against systemic financial risks is the eternal theme of financial work and the government should take stronger initiative to monitor, warn against and deal with risks in a timely manner, Xi said.

Cheng Shi, chief economist at ICBC International, said the meeting's results will help China achieve "stable and gradual breakthrough" in the financial reforms as the leadership has sought to lift the efficiency of financial regulation, maintain market order and stability, and to clarify the core function of the financial sector.

The government will continue to deleverage the economy by firmly taking a prudent monetary policy and prioritizing reducing leverage in state-owned enterprises, Xi added.

The country will also deepen financial reforms by improving financial regulation coordination and shoring up weak links in supervision. He said the central bank's role in preventing systemic risk will be strengthened, according to an official statement released Saturday.

Premier Li Keqiang said reform of the financial regulation framework should be based on domestic conditions and all financial businesses will be supervised.

Xi said the country would further open up its financial market to promote the internationalization of the yuan and capital account convertibility at a steady pace.

China will also increase efforts in improving legal framework, credit mechanism and talent development for the financial sector to help Chinese economy expand steadily, Premier Li said.

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