Chinese local finance offices sharpen their teeth after Xi orders crackdown on scammers
Drive to enhance regulatory powers follows instruction from President Xi Jinping to target Ponzi schemes
Local Chinese governments are upgrading their previously toothless financial offices to powerful regulatory bureaus in response to President Xi Jinping’s demand to clean up the country’s rampant Ponzi schemes and online lending businesses.
While the ongoing change is not designed to create new agencies, it is a key stage in the process of forging a new financial oversight system that values control and risk prevention over development and deregulation.
China’s northern Hebei and Shandong provinces, where illegal fundraising activities have been particularly serious problems, have already empowered the local financial offices, which used to focus on policy coordination, to act as “financial regulatory bureaus” with the power to issue licences, to check sites and to issue fines, according to local official media reports.
The southern city of Shenzhen, on the forefront of China’s cross-border capital flows, decided last week to do the same.
Other Chinese areas, including Hubei, are expected to follow suit, and this will become a nationwide trend even though there have been no clear instructions from the central government, the 21st Century Business Herald newspaper reported.