Official rules out merger of four regulators
A senior party planner has dismissed reports that Beijing will merge four ministry-level agencies that oversee financial sectors into a mega-ministry to streamline the regulatory process.
Zheng Xinli, deputy chief of the Central Policy Research Office, a top think-tank to the ruling party's Central Committee, said the government was not considering merging the People's Bank of China, the China Banking Regulatory Commission, the China Insurance Regulatory Commission and the China Securities Regulatory Commission.
In a keynote policy address to the 17th Party Congress in October, President and Communist Party chief Hu Jintao said that the creation of mega-ministries was one way to streamline the government.
Since then, speculation has been intense that the central bank and regulatory commissions on securities, banking and insurance will be merged into a single department. There are similar rumours that a mega-ministry of energy will oversee coal mining, crude oil, electricity and renewable energy.
But Mr Zheng said the current mechanism of individual regulators for different segments was useful to 'strengthen supervision, divert risks and ensure financial security', the Shanghai Securities News reported yesterday.
'Separate regulation is more helpful in fulfilling key accomplishments spelt out by the 17th Party Congress for the financial sector,' Mr Zheng said. He added the party's decision on the division of power and supervision among various financial industries was correct.
However, sources said the government was studying the proposal to merge the regulator bodies, though a decision would take time due to the complexities involved.
'The government has been studying consolidation proposals that would help eliminate redundancies, improve efficiency and allow greater co-ordination between financial regulatory bodies,' said Zhao Xijun, associated dean of the School of Finance of Renmin University.
Galaxy Securities chief economist Zuo Xiaolei said there was a need for a mega department to co-ordinate the development of the financial sector. However, the complexity of financial businesses makes such consolidation a complicated task that the government needs time to study.
'As regulators are now getting more closely involved with each other, a mega-agency to regulate all financial sectors is arguably needed to improve efficiency and coordination,' Ms Zuo said.
Meanwhile, Beijing is not likely to set up a new Ministry of Energy during the National People's Congress in March because of bureaucratic infighting, the China Daily reported yesterday.
The initial draft of the energy law, released early last month, called for the establishment of a unified energy ministry, which would involve the reorganisation of existing government departments, including the National Development and Reform Commission, the Ministry of Water Resources and the Ministry of Agriculture.
