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The Chinese government held its National Financial Work Conference on July 14 and 15, where President Xi Jinping emphasized that financial work should make serving the real economy a top priority.
This has been interpreted as another signal that China will gradually shift its focus from the virtual economy to the real one. According to China’s National Bureau of Statistics, China’s financial sector saw the lowest growth rate in Q2 among all the industries the bureau’s statistics covered. Analysts believed Xi’s address will enable capital to flow to the real economy more quickly and efficiently, rather than simply circulate between different financial markets.
Financial risk prevention is another focus of the conference which, according to analysts, means that China will further tighten its financial supervision and close some management loopholes.
The conference, for example, has set up a responsibility claim system to control local governments’ debts and has required larger-scale deleveraging for State-owned enterprises which are close to bankruptcy.
According to the statistics, China’s GDP grew by 6.9 percent in the first half of 2017, higher than expected. Analysts attributed it to China’s supply-side reform and tightened control over financial risks.
