Delegates and officials gather at The Great Hall of the People in Beijing on March 5, 2023, for the opening of the annual National People’s Congress.
Lintao Zhang | Getty Images News | Getty Images
BEIJING — China plans to overhaul its financial regulatory system by consolidating aspects of the central bank and securities regulator under a new entity, while doing away with the existing banking regulator.
That’s according to a draft released late Tuesday as part of China’s ongoing annual parliamentary meeting, known as the “Two Sessions.” Delegates are set to approve a final version on Friday.
The changes follow similar adjustments to China’s government structure that have occurred roughly every five years over the last few decades. The moves also come as Beijing has increased regulation on parts of the economy that had developed quickly, with little oversight.
The latest plan calls for the establishment of a National Financial Regulatory Administration, which replaces the China Banking and Insurance Regulatory Commission and expands its role.
The new regulator is set to oversee most of the financial industry — except for the securities industry. Responsibilities include protecting financial consumers, strengthening risk management and dealing with violations of the law, the draft said.
The China Securities Regulatory Commission’s investor protection responsibilities are set to shift to the new financial regulator.
The People’s Bank of China’s responsibilities for protecting financial consumers and regulating finance holding companies and other groups are also set to shift to the new administrator.
“China’s regulatory reforms will strengthen regulators’ capability to establish and enforce a unified regulatory framework, as well as reduce the room for regulatory arbitrage,” David Yin, vice president, senior credit officer, at Moody’s Investors Service, said in a note.
“In addition, the reform targets to strengthen the central government’s control of financial regulation…
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