China’s new financial gatekeeper Li Yunze strikes an optimistic note, vowing to wipe out ‘blind spots’ to protect economy from risks
- There is “no change in China’s role as the main driver of global growth,” said Li Yunze, head of the National Financial Regulatory Administration (NFRA) in Lujiazui
- The regulator will spur banks to increase their credit support to revive domestic demand, especially in so-called green consumer finance
The gatekeeper of China’s banking and insurance industries struck an optimistic note in his first major public speech, pledging to eliminate regulatory blind spots to make the 400 trillion yuan (US$56.2 trillion) sector more conducive to global capital.
The growth trend of China’s economy remains fundamentally intact, and there is “no change in China’s role as the main driver of global growth, from which we get our biggest backing to prevent and defuse financial risks,” said Li Yunze, head of the National Financial Regulatory Administration (NFRA), during the Lujiazui Forum in Shanghai. “China’s financial industry is operating steadily and any risk is generally controllable. We have full confidence and the capability to hold onto the bottom line [in avoiding] any systemic financial risk.”
The core objective of financial regulation is to prevent any systemic risks from the banking, insurance or securities industries from hurting the underlying economy or pushing the growth trend off track, Li said. In this regard, the regulator will spur banks to increase their credit support to revive domestic demand, especially in so-called green consumer finance such as the purchase of electric vehicles and green household appliances.
Advanced manufacturing, emerging industries earmarked for strategic importance, and upgrades to traditional sectors will also get regulatory support, Li said at the start of the two-day conference in China’s commercial hub. The regulator will guarantee financing of investments in housing redevelopment in mega cities and infrastructure projects, he said.
Policymakers are grappling with the prospects of stumbling growth, as the world’s second-largest economy struggles to revive production and fill jobs after three years of draconian anti-Covid policies. Revenge spending has failed to materialise after a brief spurt of activity, as rising unemployment forced many households and fresh graduates to postpone big-ticket purchases.