Chinese President Xi Jinping presided over the meeting of the Politburo, the CCP’s highest decision-making body, the official Xinhua news agency reported today.
A dispatch released by the agency indicates that party leaders stressed that “preventing and neutralizing financial risks greatly influences national security”, and that “it is an important work to achieve high-quality development”.
“Judicial rules will be formulated to hold accountable those who fail to prevent financial risks”, they warned.
“The objective is for the party to continue to exercise full and rigorous self-governance and also to reinforce the CCP’s centralized leadership over the financial sector, so that administrative departments and financial institutions assume their responsibilities”, stressed the Chinese leadership. .
Officials “at all levels” will be asked to “ensure that the various tasks aimed at strengthening financial regulation in all areas are correctly carried out”.
“Regulations must be applied to the letter and violators must be held accountable. Those who fail to fulfill their duties must be held accountable and will be punished,” warned the PCC, at a time when several former officials were punished for corruption and when some agencies debt ratings lowered the country’s rating outlook to “negative”, given the “increasing risks” for public finances.
At the end of last year, Chinese authorities committed to “strengthening financial supervision” to “effectively prevent and neutralize risks”, at a time when several local and regional administrations in the country are facing debt problems and the real estate crisis is drag economic recovery.
The PCC leaders then recognized that “problems of corruption and financial chaos continue to arise” and highlighted the need to “strengthen” the sector’s “weak” supervisory capabilities.
One of the issues addressed at that meeting was the aforementioned problem of local government debt, which, according to the International Monetary Fund, accumulated around 9 billion dollars of “hidden debt”, more than double the value in 2017.
The lack of liquidity was exacerbated by a crisis in the real estate sector, as the sale of land by local governments constituted an important source of revenue for construction companies.
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