China’s Central Commission for Discipline Inspection (CCDI) has warned of the presence of major “hidden dangers” in the country’s financial sector, including collusion between regulators and malfeasants, as well as signalled greater intervention by the party in regulatory matters.
The commission published a statement on its official website warning of signal risks in the country’s financial sector just following the closure of the second plenary session of the 19th CCDI, as well as a study session on Xi Jinping’s “socialism with Chinese characteristics in a new era.”
“Finance is the core of a modern economy – the ‘talisman of the state.’ President Xi Jinping has stressed that ‘financial security is the key component of national security.’
“In particular the work of the central bank is the central sluice gate for monetary policy, the central gateway for financial risk, and occupies an extremely important position in the broader environment of China’s economic development and social stability. It is in fact work which is extremely political in nature, relates to national security and national interests, relates to the immediate interests of the common people.
“At present, a number of major hidden risk hazards have emerged in the financial sector, such as ‘cats and mice colluding’ at financial regulators, a large volume of ‘unlicensed driving,’ as well as illegal fund-raising and other forms of financial malfeasance, which have brought major harm to the public.”
According to CCDI the source of problems in China’s financial sector lies in inadequate oversight by the Chinese Communist Party.
“This involves the problem of needing to improving systems and mechanisms, but in truth it’s people who suffer from the problem. Problems that have arisen in relation to the ‘four self-confidences’ and the ‘four awarenesses’….are specific expressions of the hollowing of party leadership, a lack of party establishment, and weak party awareness.
“Organized establishment of the party remains inadequate…and in terms of party awareness, some party branch secretaries suffer from sever shortcomings with respect to party knowledge they should possess and be capable of applying.”