CHINA TO MERGE REGULATORS

Authorities seeking more clout to crack down on riskier lending practices, trim high corporate debt levels

CHINA is merging its banking and insurance regulators and giving new powers to policymaking bodies such as the central bank in the biggest government shake-up in years.

The revamp is a cornerstone of President Xi Jinping’s agenda to put the leadership of the ruling Communist Party squarely at the heart of policy with Xi himself at the core of the party.

The economy and the party have become ever more intertwined since the once-in-fiveyears party congress in October when Xi consolidated his grip on power, with party control deemed necessary to help push through reforms.

The long-awaited move to tighten oversight of the US$42 trillion (RM164.22 trillion) banking and insurance sectors comes as authorities seek more clout to crack down on riskier lending practices and reduce high corporate debt levels.

“Deepening the reform of the party and state institutions is an inevitable requirement for strengthening the long-term governance of the party,” Xi’s top economic adviser and confidante Liu He wrote in a commentary in the official People’s Daily yesterday.

The heads of the new merged regulator, ministries and departments will be announced by March 20.

China would also form a national markets supervision management bureau, according to a parliament document yesterday.

The powerful bureau will take on the pricing supervision and anti-monopoly law enforcement role from the National Development and Reform Commission, Ministry of Commerce and the State Administration for Industry and Commerce.

The new bureau “will undertake unified antitrust enforcement and standardise and safeguard market order”, among other duties, said the State Council in a proposal submitted to the annual parliament session.

China was among the global economies seen as most vulnerable to a banking crisis, said the Bank for International Settlements at the weekend, though Beijing had maintained that debt risks were under control.

The merger of the China Banking Regulatory Commission (CBRC) and China Insurance Regulatory Commission (CIRC) was aimed at resolving existing problems such as unclear responsibilities and cross-regulation, according to the parliament document.

The function of making important laws and regulations of the CBRC and CIRC will be transferred to the People’s Bank of China as the central bank takes on a bigger role.

However, the securities regulator, the China Securities Regulatory Commission, will remain a separate entity.

Deepening the reform of the party and state institutions is an inevitable requirement for strengthening the long-term governance of the party. LIU HE President Xi Jinping’s top economic adviser