Financial Stability and Development Committee Calls for Modernization of Central Bank System, Improvements to Fintech, Greater Bilateral Opening

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One of China’s top financial authorities has outlined key near-term policy themes for reform and regulation of the Chinese finance system.

At a meeting convened on 31 October the State Council’s Financial Stability and Development Committee (FSDC) stressed the need to “establish a modern central banking system, improve money supply adjustment mechanisms, and improve market-based interest rate formation and transmission mechanisms.”

FSDC called for the “establishment of mechanisms for finance to effectively support the real economy; increases to the fintech level and strengthening of financial inclusion,” as well as “deepening of reform of state-owned commercial banks and reform and optimisation of policy-based finance.”

The FSDC meeting also emphasised the need for “strengthening the pivotal role of capital markets, comprehensive implementation of a share issuance registration system, establishment of normalised market withdrawal mechanisms, and increases to the direct financing ratio.”

In line with recent calls from the Chinese Communist Party and the Chinese central bank, the FSDC called for “driving bilateral opening of finance.”

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