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SHANGHAI, CHINA, March 15, 2018 /24-7PressRelease/ -- The intended overhaul, along with the planned establishment of a number of new ministries was revealed at the annual meeting of the National People's Congress.
Ashton Whitely analysts say the shakeup, which will merge banking and insurance regulators, is designed to minimize systemic risk in the financial sector. The overhaul of China's financial sector has been an important task for Beijing.
According to Ashton Whiteley analysts, China's Insurance Regulatory Commission will be merged with the Banking Regulatory Commission and the newly formed super regulator will supervise all of China's insurance and banking sectors.
Some of their tasks will be reassigned to the PBoC which will oversee the making of new regulations and laws.
Liu He, top economic advisor to President Xi Jinping stated that the overhaul would be widespread and would help to rid state agencies of inefficiencies. Liu added that increasing the degree of reform of the ruling party as well as the state's institutions was a necessary step to ensure the longevity of the party.
The reforms are part of President Jinping's strategy to fortify the central government's hold over the economy, take a firmer stance on the financial industry and ward off unnecessary risk and borrowing.
Ashton Whiteley analysts have stated that the increasing amount of debt carried by many Chinese owned businesses, state-owned operations and local governments has been a serious concern for a number of years.
Ashton Whiteley analysts believe that gaps in the financial regulatory organizations needed to be sealed and that imperfections in regulations must be adjusted in order to neutralize financial risk in the sector.
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