Coronavirus: China’s financial stability body led by Liu He steps up meetings amid heightened financial risks

Financial Stability and Development Committee, which oversees Chinese financial regulation, has been meeting intensively amid the economic fallout from Covid-19

The agency, chaired by Vice-Premier Liu He, agreed this week on more flexible monetary policy and greater support for small firms

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China’s Financial Stability and Development Commission led by Vice-Premier Liu He agreed to boost support for small firms this week. Photo: AP

Published: 2:48pm, 9 Apr 2020Updated: 11:18pm, 9 Apr 2020

China’s top financial committee headed by Vice-Premier Liu He has held a series of intensive meetings behind closed doors in the past three months as the coronavirus pandemic has roiled global markets and brought the world’s second biggest economy into uncharted waters.

The Financial Stability and Development Commission, which Liu leads as top economic adviser to President Xi Jinping, held its 25th and most recent meeting on Tuesday, an official statement said this week. The committee last announced its 14th meeting in early January.

In other words, the commission, which includes China’s central bank governor Yi Gang, convened 10 meetings in-between at a frequency of nearly one a week. The commission does not publish its meeting agenda beforehand.

While none of the gatherings were publicly disclosed, their frequency shows Beijing’s concerns about heightened economic and financial risks facing the country, which could report its first official economic contraction in the first quarter of this year since 1976.

At a Politburo Standing Committee meeting on Wednesday, Xi said that “downside risks in the world economy have increased while instability and uncertainty have grown significantly”.

In particular, Xi said that China must make “ideological and work preparations” to face changes in the external environment “for a relatively long period of time” – a polite way of saying China must be ready for a more unstable and hostile global environment.

The recent concentration of commission meetings reflected deep worry over the fate of the economy in policy circles, said Ding Shuang, chief Greater China economist of Standard Chartered Bank. He added China’s financial regulators would need to work out how to apply plans made by the country’s top leaders.