China’s decision to establish a central financial commission has been lauded by analysts as a crucial move towards strengthening and refining financial supervision, and preventing and defusing major financial risks. The plan, jointly issued by the Communist Party of China Central Committee and the State Council on Thursday, seeks to promote the healthy and steady development of the financial sector in the long run, with a focus on addressing financial safety issues and strengthening financial risk prevention.
The new commission will be responsible for top-level planning, coordination, and overall advancement of financial stability and development, as well as supervising the work’s implementation. It will also study and deliberate major policies and matters in the financial sector. The previous financial stability and development committee under the State Council and its working bodies will be replaced by the office of the new commission.
The establishment of the new central financial commission, together with the newly established national financial regulatory administration, will ensure a more orderly and reasonable division of responsibilities in terms of financial supervision, according to Dong Dengxin, director of the Wuhan University of Science and Technology’s Finance and Securities Institute. The central financial commission will assume its responsibilities to ensure the top-level design and overall planning, with financial safety among the top priorities of national security, while the national financial regulatory administration will focus more on day-to-day administration and supervision of China’s financial sector.
The move is expected to promote the healthy and long-term development of the financial sector, better support the development of the real economy, and foster China’s high-quality development. As Lou Feipeng, a senior economist at Postal Savings Bank of China, notes, “The establishment of the new central financial commission will help bolster financial supervision coordination and remove the regulatory vacuum as well as foster high-quality development of the financial sector to better serve economic and social development.” The establishment of this commission marks a key move to strengthen the Party’s leadership in financial supervision and management, according to Yang Haiping, a researcher at the Central University of Finance and Economics’ Institute of Securities and Futures.