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Last updated at: (Beijing Time) Friday, February 08, 2002

China Vows to Increase Financial Supervision, Reform

China has outlined the priorities for its financial sector in the coming few years, such as improved supervision, more financial reforms and regulation of the financial system to reduce financial risk and improve financial services.
The priorities were determined at a three-day national conference on finance held by the Central Committee of the Communist Party of China (CPC) and the State Council.


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Guiding Principles & Major Tasks Enlarged

Senior Chinese leaders, including Jiang Zemin, Li Peng, Zhu Rongji, Li Ruihuan, Hu Jintao, Wei Jianxing, Li Lanqing attended the meeting which concluded in Beijing Thursday.

Addressing the meeting, Jiang, also general secretary of the CPC Central Committee enlarged on the guiding principles and major tasks for the financial sector in the future.

  • Specific Goals Fixed


    • During his speech to the meeting, Premier Zhu listed the specific goals needed to improve financial supervision and regulation, planned reforms of the state-owned commercial banks and other priorities.

  • Problems Plaguing Financial Sector


    • The meeting called for more effort in dealing with the problems plaguing the country's financial sector, such as inadequate supervision and regulation, a lack of sound operational skills in financial companies and an indifferent sense of social credit, loose management, a shortage of financial professionals and insufficient financial services and a lack of new ideas.

  • Major Targets from 2001 to 2005


    • The meeting also set out the major targets for the country's financial sector during the period from 2001-2005, which include vigorous and efficient supervision and improved regulation, sound operational methods for financial companies, significant improvement in asset quality and financial returns, as well as in financial markets, financial services and corporate competitiveness.

    Supervision and Regulation Stressed

    The meeting stressed the importance of supervision and regulation, describing them as the most important factors in the financial sector.

  • Most Important Factors


    • Improved supervision and regulation to reduce risk and maintain financial stability is the basis for further financial reform and development, and the way to safeguard national economic security, the meeting pointed out.

  • Aim of Financial Supervision


    • The aim of financial supervision is to ensure open, fair and orderly competition in the financial markets in accordance with the law, to prevent systematic risks, and to protect the legitimate rights and interests of depositors, investors and policy holders, the meeting noted.

    It called on regulatory bodies from banking, securities and insurance sectors to raise their standard of supervision through improving supervision regulations, systems, and means and methods.

    Reform of State-owned Banks as Focal Point

    The meeting described the wide-ranging reforms of the state-owned commercial banks as the focal point for the whole financial reform, because they have been playing a very important role in the country's economic and social development.

    The state-owned banks were called on to improve constitutional reforms and follow prudent accounting principles and strict information disclosure systems, to lower their ratios of non-performing assets, and improve their profitability.

    The meeting noted qualified commercial banks solely owned by the state may be reorganized into share-holding commercial banks in which the state has the controlling share. The shares may be listed when the time is right.

    Policy of Securities Market Unchanged

    The meeting repeated that the policy of regulating and cultivating the securities market will remain unchanged, adding efforts should be made to crack down harder on irregularities.

    It also called for the construction of a social credit system, including corporate and individual credibility.

    Senior officials from the Party and the central government and leading provincial officials and financial officials were among those attending the meeting.



    China to Regulate Financial Market

    PBOC, CSRC, and CIRC lately held their 2nd Joint Conference to make a study into the work of financial supervision and management and their tasks in the near future.
    A consensus reached was that the three parties as said should step up mutual exchange and cooperation.

    Central Bank Issues Guidance on Financial Supervision

    The People's Bank of China (PBOC), the central bank, issued a guidance notice on the standardization of supervision over the financial market in China.
    The guidance, drawn from former experiences of the central bank's supervision efforts and a reference from international practice, includes four parts. Click Here for more details.

    Premier Zhu Stresses Financial Supervision

    The financial sector of China should focus on strengthening supervision and internal control, rectifying the order and further increasing reform this year, Chinese Premier Zhu Rongji said on January 15, 2001.




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