China’s Financial Regulators’ 2014 Priorities

CHINA’S FOUR MAIN financial regulators have outlined their legislative priorities for the year: No great surprises. The introductions of catastrophe and food liability insurance, probably the least discussed reform proposals to date, are in line with the Party’s overall top priorities for the year, food security and improving the rural environment. In summary:

People’s Bank of China: Expand cross-border use of the yuan; maintain steady credit growth; improve the multi-tier capital market; and engage further in international financial regulation policy-making.

China Banking Regulatory Commission: Pilot three to five private banks, opening up the banking sector to domestic and foreign private capital; gradually reduce the threshold for foreign banks to enter the banking sector and ease their RMB operation requirements; keep a close eye on big housing developers, and reduce the risk of default through weak links in the construction industry’s money chain; restructure overcapacity industries, liquidating their assets and reducing the risk of default.

China Securities Regulatory Commission: switch IPOs from the current approval system to one based on registration; let the timing of IPOs and how shares are issued be determined by the market, as long as issuers disclose all relevant information as required; abolish approval requirements on 21 items over the next three years starting from 2014.

China Insurance Regulatory Commission: work with the finance and other ministries to implement catastrophe insurance; set up food liability insurance, given the importance of food safety in China.

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