China is launching a fresh round of inspections that would put the country's financial institutions under renewed scrutiny as the ruling communist party seeks to exert more control over the sector amid looming debt risks.
The Central Commission for Discipline Inspection, China's top antigraft agency and a party organization, said Monday that it would dispatch patrol teams to dozens of state entities, including the country's top financial regulators and biggest state-owned lenders.
The inspections, analysts say, are partially aimed at ensuring economic technocrats are in line with the top leadership's policy intentions and improving their regulatory capacity to stem financial risks.
Monday's announcement comes at a time when Chinese leaders are doubling down on efforts to mitigate the country's mounting debt risks after years of borrowing and spending sprees by local governments. Beijing is also trying to prevent a protracted property slump from snowballing into systemic financial risks.
In an October meeting, China's top leaders had criticized the financial sector for not efficiently serving the real economy.
Li Xi, head of the antigraft body, on Monday urged the dispatched teams to help promote high-quality development, defuse risks and deepen reforms through their inspections. Back in January, Chinese President Xi Jinping pledged to intensify antigraft efforts in areas including the financial sector.
The government agencies to be inspected include China's central bank, the foreign-exchange and securities regulators, as well the newly established National Financial Regulatory Administration, according to a list published by the state-run Xinhua News Agency. China's top planning agency, as well as ministries of finance, natural resources, housing and commerce are also included in the list.
Inspection teams will also tour the Shenzhen and Shanghai bourses, financial conglomerate Citic Group and some of China's biggest state-owned commercial banks and insurers, Xinhua reported.
China's vast financial sector has come under intensified scrutiny in recent years as the ruling communist party looks to step up financial regulation and reassert leadership over economic policymaking. A central financial commission was created last year to strengthen the party's oversight on the sector.
"Finance has already been targeted by the Communist Party's anti-corruption brigade for five years now, with every major institution and regulatory agency having lost multiple high-ranking officials," said Gavekal Dragoneconomics analyst Zhang Xiaoxi in a January note.
However, these repeated probes are leading to a more risk-averse financial bureaucracy increasingly focused on faithfully implementing policy directives, Zhang said.
Write to Singapore Editors at singaporeeditors@dowjones.com
(END) Dow Jones Newswires
04-09-24 0619ET
