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China is working to improve the financial climate via legislation and innovation - BDTone24.com
December 6, 2021, 7:44 pm

China is working to improve the financial climate via legislation and innovation

Abdus Salam Azad, Beijing, China
  • Published: Wednesday, October 20, 2021,
China is working to improve the financial climate via legislation and innovation

Guo Shuqing, head of the China Banking and Insurance Regulatory Commission, told Xinhua in an interview that China is working to improve the financial environment via stronger rules, regulations, and innovation.

China’s financial system, as the world’s second-largest modern financial system, has high openness, competitiveness, justice, and inclusion, according to Guo, who is also the Party Secretary of the People’s Bank of China, the central bank.

According to him, China’s financial sector has over 4,000 institutions, making it very competitive. The four major state banks own just approximately 34% of the market, with industry concentration much lower than in industrialized nations.

Furthermore, he said, China’s mobile payment, online credit, and internet insurance industries are growing, with private money dominating these sectors.

“It’s impossible to have such a scenario without the backing of financial institutions and regulations,” Guo said. However, Guo acknowledged that “monopolies and unfair competition are significant issues in some sectors of China’s financial industry.”

He highlighted the uncontrolled growth of industrial capital in the finance industry, illicit financial operations masquerading as “financial innovation,” and unfair competition in different financial services by certain big internet platforms as significant issues in the sector.

As a result, anti-monopoly and anti-disorderly capital growth policies are urgently required and favorable to establishing a new development paradigm, advancing high-quality development, and promoting shared prosperity, according to Guo.

China has made several steps to fight monopolies, including tighter oversight of large shareholders in banking, insurance, and securities firms and their equity management, as well as the 2020-2022 action plan for state-owned business corporate governance reform.

Guo emphasized that the Chinese government prioritizes both stronger rules and innovation, adding that financial innovation is based on the principle of “people first.”

He promised to take further steps to improve the private economy’s financial climate, including pushing banks to expedite their digital transformation and offering private companies with more accessible financial services.

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