China’s banking regulator calls for more risk controls, oversight in ‘complicated, severe’ financial situation

Sectors with vast financial resources, including internet and big data firms, are at greater risk of being over-leveraged, and preventing disorderly expansion of capital is seen as critical

From preventing home-grown threats such as the Henan cash crisis, to guarding against financial risks from abroad, China’s economic and financial authorities have their hands full

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A cash crisis at rural banks in China’s Henan province earlier this year triggered protests. Photo: Weibo

Published: 8:30pm, 3 Nov 2022

China’s banking regulator is calling for enhanced efforts to contain financial risks amid rising uncertainties at home and abroad, especially in industries that are closely tied to the general public, including internet financing platforms.

Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said that the massive financial resources of some domains – including the internet and big data industries – put them at greater risk of becoming over-leveraged, and this must be prevented.

“Balancing fair competition, encouraging technological innovation, and preventing disorderly expansion and savage growth [of capital] is an arduous task that we are facing,” Guo wrote in an article accompanying President Xi Jinping’s full work report for the 20th party congress.

“Data security, antitrust and the robust operation of financial infrastructure have become new concerns,” Guo said.

Guo added that financial innovation must be carried out under the premise of prudential supervision – which includes requiring financial firms to control risks and hold adequate capital – while normalised supervision of online financial platforms should be implemented.

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