China Creates New Central Bank To Be Controlled By Cabinet And The Executive

The Chinese government will form a new financial regulatory body to reduce oversight, substituting its banking and insurance regulator.

It will also set up a new data body as part of a broader government reform revealed on Tuesday, March 7, 2023.

The new recommendation would bring control to the financial services industry, excluding the securities sector, under the State Council or cabinet, to strengthen oversight.

President XI Xiping revived his call for reforming the Communist Party and state institutions.

The new plan will abolish the Banking and Insurance Regulatory Commission (CBIRC), with its responsibilities moved to the new management and specific central bank and securities regulator functions.

Under the new policy, staff members at the central level of state institutions will be cut by 5%.

The statement reads:

“The overhaul of financial regulation framework reflects the new focus on ‘dual circulation’ – both domestic and global circulation of the economy – and ‘uniform national markets’,” said Winston Ma, an adjunct professor at New York University law school.

“Going forward, different financing markets – equity, debt, and insurance – are set to be regulated more holistically, and at the same time, financial markets regulation and industry policy-making are more integrated than before,” he said.

The country’s financial sector is currently controlled by the People’s Bank of China (PBOC), the CBIRC, and the China Security Regulatory Commission, with the cabinet’s Financial Stability and Development Committee having oversight.

According to the statement centralised power appeals to many Chinese.

The lawmakers will vote on the constitutional reforms on Friday, March 10, 2023.