China's financial system has gradually evolved, says central bank official

PHOTO VCG BEIJING - With constant efforts to push structural reforms and expand opening-ups, China's financial system has gradually evolved and matured over the past decade, providing solid support for the stability and development of the economy.

The country has reformed its financial system to spur the real economy, kept risks within control and aligned with the international market.

China has enriched its toolbox with the aim of allowing a virtuous circle of the real economy and financial system, despite sticking to its prudent monetary policy.

During a briefing on Thursday, Chen Yulu, vice governor of the People's Bank of China, said that China's financial market saw improvements in its ability to serve the real economy over the past decade.

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The M 2 measure of money supply that covers cash in circulation and all deposits came in at 238.29 trillion yuan about $35.5 trillion with the annual growth rate from 2012 to 2021 reaching 10.8 percent.

Besides ensuring that market liquidity remains ample, the government has put in place policy incentives to help with financing difficulties for the private economy and small businesses, and has put in place a diversified capital market to cater to the needs of various entities.

As of the end of the year, the outstanding inclusive loans had topped 20 trillion yuan, supporting over 50 million small and micro businesses and individual businesses.

The country has managed to balance advancing financial development with reining in the related risks due to the fact that the government has been on the agenda for the past decade of forestalling financial risks.

The blind expansion of financial assets was reversed with important results achieved in preventing and solving major financial risks, said Xiao Yuanqi, vice chairman of the China Banking and Insurance Regulatory Commission.

High-risk shadow banking has been reduced by about 25 trillion yuan compared to the historical peak, while a total of 16 trillion yuan of non-performing assets have been disposed of in the past decade, according to Xiao.

Continuous efforts have been made to build a solid financial security defense line of anti-money laundering and anti-fraud, while strengthening financial consumer protection.

At a time when the rising tide of protectionism threatens to jeopardize the global economic recovery, China has moved steadily to deliver its promise of a wider opening-up in the financial system.

Over the past decade, opening-up moves have attracted more foreign investors to the Chinese market, from expanding the connectivity between domestic and international capital markets to facilitating overseas institutional investors to take part in China's exchange bond market.

Foreign entities' holdings of domestic RMB financial assets have increased by 2.4 times compared with 10 years ago, while the share of Chinese yuan in the International Monetary Fund's Special Drawing Rights SDR basket has gone from 10.92 percent to 12.28 percent.

Li Chao, the vice chairman of the China Securities Regulatory Commission, said that China will strive to build a regulated, transparent, open, dynamic and resilient capital market.

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