As reported by the Financial Times, the Chinese Communist Party (CCP) is close to establishing the Central Financial Commission, a powerful body set to oversee China's financial sector. Nearly 100 officials have been recruited to staff the new super-regulator ahead of the National Financial Work Conference, a two-day, closed-door event that is taking place this week.
The conference, which occurs every five years, will set the agenda for financial sector reform, according to people familiar with the matter.
President Xi Jinping introduced this commission to become the de facto regulator and decision-maker for China's $61 trillion financial sector, reducing the influence of other state institutions like the People's Bank of China and the China Securities Regulatory Commission. The move reflects what some believe to be President Xi Jinping's efforts to centralize power within the CCP and strengthen control over the financial sector.
The commission, staffed with party members from various financial watchdogs, aims to address regulatory gaps, particularly in areas like shadow banking and peer-to-peer lending. "Party oversight of China's financial system . . . will become far more centralised and controlling, in line with the ways in which the party itself and economic governance have changed already," said George Magnus, an associate at Oxford University's China Centre.