Analysis What Beijing’s super regulator means for China’s economy
Committee to have great powers over financial affairs, with the potential to reduce turf wars and infighting among watchdogs, analysts say
China has officially launched a super powerful supervisory body as the key institution to keep financial crises at bay in the coming years.
China under President Xi Jinping’s rule has avoided a financial meltdown over the past five years, but the US$12 trillion economy is under constant threats of financial turmoil stemming from excessive credit and debt, plus lax market oversight.
Xi said at a key national financial work conference in July that a new committee must be created to oversee a fragmented regulatory system and to whip watchdogs into staying alert.
The result was the Financial Stability and Development Committee under China’s cabinet, the State Council.
Four months after Xi ordered its creation, the committee has convened its first meeting under Ma Kai, a vice-premier set to retire next March, paving the way for one of Xi’s chosen officials to run the committee during the president’s second five-year term in office and beyond.
The man likely to succeed Ma to head the committee is Liu He, Xi’s “trusted economic lieutenant”, according to a research note by Sun Hung Kai Financial analysts. Liu has secured a seat on the 25-member Politburo, creating an opportunity for his election as a vice-premier at the annual meeting of China’s legislature in March.