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(Bloomberg) — China’s regulator wants provinces to come up with their own plans to handle financial risks, according to a report, about a month after officials pledged to set up a mechanism to resolve local debt issues.
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The country should make a greater effort in financial risk management but the policies need to be tailored, avoiding a one-size-fits-all approach, the Xinhua News Agency cited Li Yunze, head of the National Financial Regulatory Administration, as saying in an interview. Provinces have to devise their own policies on how to handle risks, according to the report.
The world’s second-largest economy has struggled for traction this year as a bounceback from restrictive Covid Zero policies proved to be softer than expected and a property crisis dragged on. That’s prompted successive waves of support from central and local authorities, but some economists have argued that government debt is now too concentrated at the local level.
On risk management, there’ll be “one province, one policy,” Li was cited as saying in the article, which was published in a question-and-answer format.
“Risk prevention and management are the eternal themes,” Li said. The agency will focus on looking into people who cause major risks, pledging to deepen so-called rectification of chaos and disruptive behavior in markets, he said.
In late October, the two-day Central Financial Work Conference, which was attended by President Xi Jinping, pledged to optimize the debt structure of central and local governments. At the meeting, officials also vowed to set up a process to resolve debt risks tied to local authorities.
In the Xinhua article, Li said China will also set up a mechanism to resolve disputes over consumption, as well as another on protecting consumers’ rights.
On Saturday, Xinhua published an interview with People’s Bank of China Governor Pan Gongsheng in which he reiterated that the central bank will keep the monetary sluice in check. That type of language is usually seen by analysts as signaling how the PBOC will rein in liquidity and money supply.
–With assistance from Yujing Liu.
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