Beijing announced the setting up of a financial court in Shanghai on Wednesday after a meeting of the Communist Party’s Leading Group for Comprehensively Deepening Reforms, which was chaired by President Xi Jinping. The announcement came as Wu Xiaohui, founder of the mainland’s third-largest insurer Anbang Group, went on trial this week at the city’s No 1 Intermediate People’s Court.
Details of the specialised court have yet to be unveiled, but it is believed to play a role in punishing unscrupulous institutions and individuals while reinforcing Shanghai’s transformation into an international financial centre.
Why Beijing wants to set up a financial court in Shanghai?
The Leading Group for Comprehensively Deepening Reforms said it was part of the efforts to improve the judiciary system for the financial sector and help ward off financial risks.
Further liberalisations in the financial sector will motivate judges to broaden their knowledge and better understand financial transactions, particularly cross-border deals.
As Shanghai seeks to attract global funds and talent to help turn the city into an international financial hub, a mature legal framework that is in line with international practice is much needed to bolster investors’ confidence.