China’s leaders sign off on new rules to crack down on ‘shadow banking’
Official endorsement is latest sign Beijing is serious about cleaning up US$15 trillion asset management industry
A massive clean-up is likely to take place in China’s 100 trillion yuan (US$15 trillion) asset management industry after new regulations targeting “shadow banking” were approved.
The official endorsement by Xi Jinping is the first step from China’s top leadership in battling financial risks after Beijing reorganised its financial regulatory structure and appointed a new team.
It is one of dozens of decisions made at the first meeting of the Central Commission of Comprehensive Reforms on Wednesday, which is headed by Xi himself.
The commission also endorsed a regulation that will increase the transparency and capital adequacy requirements for non-financial investors to buy into banks, insurers and brokerage houses.
The fact that two specific financial regulations were put before the country’s top leaders, including Xi, Premier Li Keqiang and vice-premier Han Zheng, for final endorsement shows Beijing’s resolve to bring order to its shadowy financial world and sent a clear message of no tolerance for murky deals, according to analysts.