China's financial system still has many inadequacies and faces risks, said Bian Yongzu, a researcher at the Chongyang Institute of Financial Studies, Renmin University of China, addressing a late September conference on financial studies at the university.
China has a large, relatively fast-growing economy, and its financial sector is expanding – bank assets and capital markets are both growing quickly. The country’s financial technologies are in the top rank worldwide – with its internet finance well ahead other countries, Bian said. Emerging economies are seeking to reform of the international financial system, which presents China with opportunities, he added.
Nevertheless, China’s financial system still has significant inadequacies, in terms of, for example, financial infrastructure and intermediaries, efficiency of supervision and continuity of policies. Its financial structure is imbalanced, with bank loans taking up a disproportionately large share. And China has a limited say in international finance, the researcher pointed out. The country also faces threats like previously unbridled online credit platforms and a lack of management of public sentiment when it comes to the financial sector.
Bian went on to propose that to gain a larger, clearer picture of the situation, China should establish a financial strategy on a higher, rise-of-nation level. The State should guide the financial sector to render stronger support for the real economy, redouble efforts to develop financial infrastructure and stimulate fintech innovation, and strengthen international financial cooperation to speed up the internationalization of the yuan.
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