China’s top leadership pledged to comprehensively strengthen financial supervision, improve the financial system prevent and resolve financial risks and build China into a financial power at a twice-a-decade policy conference that concluded on Tuesday, according to state media Xinhua News Agency.
The tone-setting meeting, usually convened once every five years, is closely watched as it sets the direction for China’s financial policymaking for the following years.
Finance is the lifeblood of the national economy and China should strengthen financial supervision on all fronts, improve financial system, optimize financial services, prevent and resolve financial risks and promote the high-quality development of the financial sector, President Xi Jinping said at the conference.
On local government debt risks, the meeting called for the establishment of a long-term mechanism to prevent and resolve local debt risks and a government debt management mechanism that is compatible with high-quality development.
China will build a modern system of financial institutions and markets and smooth the channels for capital to flow into the real economy, it noted.
The country will optimize financing structure, make capital market play a pivotal role, deepen the implementation of registration-based IPO system, promote diversified equity financing, vigorously improve the quality of listed companies and cultivate a batch of first-class investment banks and investment institutions, it said.
On the housing market, China will promote virtual circulations between the financial sector and the real estate sector, improve the macro prudent management of real estate financing and meet the reasonable financing needs of real estate companies of all type of ownerships and adopt city-based policy tools, it said.
It will promote the high-quality development of the bond market and the foreign exchange market and will the yuan’s exchange rate largely steady at reasonable and balanced levels, it said.
China will support large state-owned financial institutions to get stronger to play a role of cornerstone for serving the real economy and safeguarding financial stability, it said.
The meeting called for efforts to promote high-level financial opening-up and in particular, the meeting urged to steadily expand institutional opening-up in the financial sector, improve cross-border investment and financing facilitation, and attract more foreign financial institutions and long-term capital to expand and conduct businesses in China.
It also called for efforts to ensure national financial and economic security, and prevent risk transmission across regions, markets and borders. This is likely a reference to the growing financial risks overseas, especially from the US, where aggressive monetary policies and chaotic political governance are threatening global markets.