Premier Li Qiang has taken the helm at the Central Financial Commission (CFC), a new organ of the Communist Party established to oversee the financial sector, and supervised a meeting on Monday where the sector’s role in supporting the real economy and managing risks was stressed.
Li was mentioned as director of the commission in a report from state news agency Xinhua covering the meeting, convened to flesh out general directions confirmed at the central financial work conference late last month.
The CFC was set up in March under the direct supervision of the party to tighten control over finance as part of a broad reshuffle of party and state institutions.
Li pledged more support for strategic sectors at Monday’s meeting, vowing to address weak links in the economy as a property market crisis weighs on growth and small businesses continue to struggle even after the lifting of stringent zero-Covid measures.
While resolving existing risks in the multi-trillion dollar financial sector, Li said, China should also improve its ability to avoid future pitfalls. The comments echoed President Xi Jinping’s emphasis on risk control during October’s central financial work conference, a twice-a-decade event with far-reaching impact on policy.
To that end, the commission should “intensify financial supervision in a comprehensive way” and better coordinate different departments, Li said.
It’s a good time for financial organisations to exert their influence
Lian Ping, China Chief Economists Forum
He also recommended detailed policies to support the growth of fintech, green finance, inclusive finance, pension finance and digital finance – five areas listed at last month’s conference as essential in fulfilling China’s ambition to be a “major financial power”.
Lian Ping, director general of the China Chief Economists Forum, said that Monday’s meeting was one of consequence, as it sought to implement principles decided at October’s conference.
“The central financial work conference set the tone, deciding what goals should be achieved and what tasks should be done, while the CFC meeting focused on how to carry out the work,” he said.
As the CFC continues its work, he added, “things should get done more quickly and effectively as they are directly put [before] the top leadership, compared with more coordination among different ministries in the past.”
While troubled small financial institutions and debt-ridden local governments are both posing challenges to financial stability, Lian said, China’s ailing real estate market is a major source of risk and the weakest point of the economy. Therefore, he added, “it’s a good time for financial organisations to exert their influence” and rescue some property developers.
The CFC is one of several powerful committees set up as direct organs of the party to deepen its influence on a range of issues, from financial markets to cybersecurity. Xi heads many of the commissions himself, including the Central Financial and Economic Affairs Commission, the party’s highest policy coordination body on economic affairs.
Li’s role at the CFC was confirmed eight months after the release of a major restructuring scheme for party and state entities. Details of new or heavily reformed bodies have been disclosed in rapid succession as the deadline for completion – the end of the year – is approaching.
Officials attending Monday’s meeting discussed and passed a plan for the division of labour for key tasks of the financial system, Xinhua reported.
Earlier this month, Vice-Premier He Lifeng was announced as head of the CFC’s office, which is responsible for day-to-day operations.
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