China Plans Tailored Response to Local Debt... "Avoid Uniform Approach"

Financial Supervisory Service emphasizes "One Province, One Policy"

Regarding the issue of local government debt pressuring China's economic growth, authorities are planning a 'tailored' response. A responsible official emphasized the need to consider the significant regional disparities and avoid uniform policies.

On the 3rd, China's state-run Xinhua News Agency interviewed Li Yunjie, Director of the China Banking and Insurance Regulatory Commission (CBIRC), who stated, "We must enhance the effectiveness of financial supervision and appropriately respond to various financial risk challenges," adding, "One policy per province is necessary." The CBIRC, along with other agencies, oversees various sectors of China's financial industry, which amounts to $57 trillion (approximately 7,395.2 trillion KRW).

[Image source=AFP Yonhap News]

In response to a reporter's question about the CBIRC's measures following recent remarks at the Central Financial Work Conference that "economic and financial risks remain high," Director Li said, "We will implement precise classification policies," and emphasized, "One policy per province, one policy per bank, and one policy per enterprise will be promoted to avoid a one-size-fits-all approach." He also stated, "While the government will intensify efforts to manage financial risks, uniform policies should be avoided," and added, "Local governments must also establish their own policies."

He continued, "Risk prevention and management are eternal themes," stressing, "We will intensify investigations into those causing significant risks and expand efforts to rectify market disorder and disruptive behaviors."

Earlier, at the Financial Work Conference held at the end of October with Chinese President Xi Jinping in attendance, it was announced that the debt structures of the central and local governments would be optimized. Participants also revealed plans to establish processes to address debt risks related to local governments.

Regarding the 'elimination of supervisory gaps and blind spots' demanded at the Financial Work Conference, Director Li emphasized, "Under the overall guidance of the Central Financial Commission, we will jointly build a financial supervision system and mechanism to cooperate with the same responsibilities, responses, and directions to ensure there are no blind spots or exceptions in supervision."

This content was produced with the assistance of AI translation services.