China will set up a national financial regulatory administration, according to a plan announced on Tuesday, in the biggest overhaul of the country’s financial supervisory apparatus in years.
The China Banking and Insurance Regulatory Commission (CBIRC), the country’s banking and insurance watchdog, will be abolished, with its role falling under the new administration, according to a plan submitted to the national legislature for deliberation.
China’s financial sector is currently overseen by the People’s Bank of China (PBOC), the CBIRC, and the China Securities Regulatory Commission (CSRC), with the cabinet’s Financial Stability and Development Committee having overall purview.
The proposed administration, directly under the State Council, or cabinet, will be in charge of regulating the financial industry except the securities sector, while certain functions of the PBOC and CSRC will be transferred to the new administration.
The new administration will “strengthen institutional supervision, supervision of behaviours and supervision of functions,” according to the plan, with all kinds of financial activities to be supervised according to the law.
Supervision will be “penetrating” and “continuous”, the proposed plan said.
Last week, President Xi Jinping renewed his call for ambitious reforms of party and state institutions, after clinching a precedent-breaking third leadership term during a major party congress in October where he sealed his place as China’s most powerful ruler since Mao Zedong.
The overall reform plan will be “targeted, intensive and wide-ranging, touching on deep-rooted interests”, Xi told the party’s Central Committee.
China’s legislature, currently gathering for their annual meeting in Beijing, will vote on the institutional reform plan on Friday.
