By Yu Ning in Global Times, July 16, 2017 at 23:18:39
The two-day National Financial Work Conference (NFWC) concluded on Saturday in Beijing. The meeting, which is staged every five years and started in 1997 in the wake of the Asian financial crisis, lays stress on financial stability and security. With the aim of reining in financial risks and strengthening financial regulation and coordination, a Financial Stability Development Committee was announced. Addressing the gathering, Chinese President Xi Jinping said that guarding against systemic financial risks is the eternal theme of financial work and the government should take stronger initiatives to monitor, warn against and deal with risks in a timely manner.
Over the past five years since the last NFWC was held in 2012, new problems have been exposed in the financial sector. Although many scholars, analysts and policymakers hold that China is unlikely to see a systemic financial crisis, they warn that relevant authorities cannot take financial risks lightly.
Finance is the core of the modern economy. Preventing financial risks and maintaining stability is an important prerequisite of financial development and reform. Besides, social and economic stability is built on financial stability. From this sense, the NFWC is of significant value as it concerns the interests of everyone as well as the stability of the nation.
China has made remarkable achievements in the financial sector since reform and opening-up, with sound development of the banking, securities and insurance industries. Internet finance, as a new development, is also rapidly rising. However, financial risks pose the biggest challenge to the Chinese economy. China’s financial sector is exposed to various risks, including illegal lending, insider trading in the securities market and fraud by insurance companies. What’s more, despite robust growth in Internet finance, laws and regulations have not kept pace with the development.
The emergence of the Internet has added difficulties to financial governance. The existing financial management is regarded as too outdated to keep up with the demands of financial governance.
As seen in economic crises that broke out in the past, financial crisis caused by financial instability is often the trigger of economic crisis. China has maintained a relatively stable economic development so far, but a worrying fact is that the financial sector is the most prone to a crisis. The attention that the central government attaches to preventing financial risks and enhancing regulation is timely and imperative. Only by taking stronger initiatives to curb financial risks, can a systematic financial crisis be avoided, economic sustainable development and social stability be maintained. http://www.globaltimes.cn/content/1056596.shtml
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