China will push ahead ‘resolutely’ with financial sector fight, says Li Keqiang
Premier says regulators have ‘lanced the boil’ of illegal market activities and will continue to tackle them
China said it will continue to “resolutely” tackle financial irregularities, after several officials and tycoons were punished last year in a crackdown on market manipulators and fraud.
“Some unlawful and [risky] conduct has been making waves in China’s financial sector,” Premier Li Keqiang said at a press briefing wrapping up the National People’s Congress on Tuesday.
China’s regulators had been working “decisively” to prevent financial risk from spreading, Li said, and had “lanced the boil” of illegal market activities to avoid moral hazard. “If similar problems emerge in the future, we will continue to tackle them resolutely,” he said.
The financial sector has expanded rapidly since China entered the World Trade Organisation at the end of 2001. From 2001 to 2016, banking sector assets grew by 12 times to reach over 224 trillion yuan (US$35.34 trillion), while those of the insurance and securities sectors also jumped – to 15 trillion yuan and 4.37 trillion yuan, respectively. But the financial market has also become a hotbed for rent-seeking, price manipulation, corruption and rampant irregularities.
In the summer of 2015, a stock market rout wiped about US$5 trillion off the value of mainland shares, sending shock waves around the world. It prompted a crackdown on financial irregularities, particularly cases where tycoons colluded with officials to take advantage of loopholes in the fragmented regulatory system.
