Preventing financial risks vital to economy

At the National Financial Work Conference last month, President Xi Jinping emphasized the need to prevent systemic financial risks, because finance is the core competitiveness of a country and financial security is a significant part of national security. The goal of financial work is to serve the real economy while preventing risks, for which financial reform is necessary.

Internationally, the US Federal Reserve’s interest rate hike and balance-sheet cuts have increased the pressure of US-dollar backflow and tightening liquidity on the global market. Therefore, it is important for the domestic financial sector to take proper measures to prevent external risks.

Domestically, while reducing overcapacity, deleveraging and adjusting the economic structure, China has entered a period of medium-to-high growth. So the regulatory loopholes in the mixed operation of the financial sector have to be plugged to prevent risks.

Since serving the real economy is the goal of finance, the authorities have to prevent financial risks to ensure stable development of the national economy.

The financial sector has developed rapidly along with China’s fast-paced economic growth, which in turn has created many risks such as shadow banking, property bubble, high leverage and local government debt.

Since serving the real economy is the goal of finance, the authorities have to prevent financial risks to ensure stable development of the national economy.