China is facing “significantly increasing challenges in terms of financial risk prevention and tackling”, but given the country’s sound economic fundamentals and its pre-emptive approach to controlling financial risks, the financial sector remains well under control – that’s the key takeaway from two major developments last week.
On Nov 25, the People’s Bank of China, the central bank, released a report on China’s financial stability, pointing out multiple challenges the country is facing in financial risk management and what it has achieved in that respect.
And on Thursday, the Financial Stability and Development Committee, the country’s Cabinet-level financial regulatory body and part of the State Council, China’s Cabinet, stressed several priorities: balance the relationship between stabilizing growth and preventing risks; enhance counter-cyclical adjustments; further reform the capital market as well as small and medium banks; ensure healthy development of the private fund industry; achieve financial inclusion and fair competition; encourage commercial banks, especially small and medium ones, to increase capital through multiple channels; improve the long-term mechanism to prevent, resolve and dispose of financial risks, so as to stabilize the financial system and sustain the economic and social stability.
