Financial supply-side reform and risk aversion highlighted at Lujiazui forum
( chinadaily.com.cn )
The 2016 Lujiazui Forum convened in Shanghai on June 12, with leaders from China's central bank and insurance, banking, and securities regulatory commissions all delivering speeches on financial supply-side reform and risk aversion. The following are their key quotes:
Zhang Tao (Vice governor of the central bank)
China has seen the rapid growth of unregulated non-traditional financial businesses in recent years. One of the reasons might be the inadequate supply of regulated traditional financial services. For instance, the financial products and services for small and micro-sized enterprises, rural and impoverished areas are still insufficient, which increases opportunities for Internet finance, featuring online payment, peer-to-peer lending, equity financing and crowd funding, which is accessible to more people than traditional financial services.
However, Internet finance has its risks that need to be solved during the financial supply-sided reform. It also needs to be under supervision, making the financial regulation network more comprehensive.
Sounder systems for the financial sector are necessary, such as guidelines to ensure financial institutions with business failures to claim bankruptcy orderly.
Xiang Junbo (Chairman of China Insurance Regulatory Commission)
Echoing the national strategy of supply-side reform, insurance products and services need to be improved based on the current changes of social structure and consumption habits, as well as the increase of the middle class.
Eligible insurance institutions shall be allowed to invest in the pension industry. Commercial health insurance shall be developed to alleviate people's difficulties of getting medical treatment. Other products such as medical insurance, property insurance, travel insurance, and education insurance are also needed to meet people's consumption needs. Small personal insurance can also be developed to give support to laid-off workers.
Guo Ligen (Vice chairman of China Banking Regulatory Commission)
Positive progress has been made in inclusive finance in China in recent years. But it still faces many problems and challenges.
To better promote inclusive finance, three ideas about it need to be clarified.
First, inclusive finance is not about charity and relief. Its aim is to offer affordable financial services to people in need and to make sure the sustainability of businesses.
Second, inclusive finance includes but is not limited to small loans. It also covers other financial products and services featuring deposits, credit loans, currency exchange, payment, insurance, wealth management and securities.
Third, inclusive finance does not mean that all the people need to be involved in finance. Illegal fundraising, financial fraud and other activities violating financial regulations must be avoided and cracked down upon.
Jiang Yang (Vice chairman of China Securities Regulatory Commission)
Avoiding systematic risks is a focus of the capital market. Sound mechanisms shall be established to track, monitor, and handle risks. Market regulations need to be strengthened. Financial institutions are encouraged to enhance their ability to control risks.
To maintain the steady development of the market, financial activities such as online equity financing, private funds, and crowd funding need to be regulated. Those who violate laws and regulations shall be strictly punished.