BEIJING (Reuters) – China will set up a new financial regulator to replace the banking and insurance supervisor as part of a sweeping administrative overhaul announced on Tuesday that also includes the creation of a national data office.
The overhaul of the financial regulatory framework reflects the new emphasis on the concept of “dual circulation”, an economic strategy intended to boost the internal and external market, said Winston Ma, professor at the Faculty of Law of the University of New York.
“In the future, the different financial markets – equities, debt and insurance – will be regulated in a more holistic way and at the same time, their regulation and the development of sectoral policies are more integrated than before,” he said. he adds.
Parliament will vote on this institutional reform plan on Friday, which will cut 5% of the workforce.
Currently, the Chinese financial sector is supervised by the People’s Bank of China (PBC), the Banking and Insurance Regulatory Commission (CBIRC) and the Securities Regulatory Commission (CSRC). The Financial Stability and Development Committee under the Council of State has more general powers.
“Now all the regulatory functions are given to the new bureau, which is basically the CBIRC with some regulatory powers taken from the BPC and the CSRC, which makes perfect sense,” said Li Nan, a professor of finance at the University. Shanghai Jiaotong University.
“The PBC will focus more on monetary policy, which is similar to what the US Federal Reserve is doing.”
Chinese President Xi Jinping last week reiterated his desire for ambitious reforms of Communist Party and state institutions.
The government will also set up an office to coordinate the sharing and development of data resources, according to a plan submitted to lawmakers for approval.
The office in question would be headed by the National Development and Reform Commission (NDRC), China’s planning agency, and will absorb some of the functions of the Central Cyberspace Affairs Commission, which oversees internet activities.
In recent years, Beijing has tightened data surveillance, fearing that management deemed too permissive by private companies could allow rival state actors to exploit information on infrastructure and other strategic interests.
(Ryan Woo, Ziyi Tang, Xie Yu, Julie Zhu, Brenda Goh and Laurie Chen; writing by Tony Munroe, French version Laetitia Volga, editing by Kate Entringer)
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