China to Merge Banking, Insurance Regulators in Big Government Shake-Up

Elias Hubbard
March 13, 2018

State Councillor Wang Yong told delegates of the parliamentary session underway in Beijing that the bureaucratic shuffle was needed to make government more effective and efficient.

The banking and insurance regulators will become a single entity, as China is aiming to streamline administration and improve its prevention of financial risks.

China is also due to announce appointment of new ministers and officials, including the foreign minister, as part of changes in every five years.

The China Insurance Regulatory Commission (CIRC), established in 1998 and overseeing 17 trillion yuan (US$2.69 trillion) of insurance assets, is to be merged with the China Banking Regulatory Commission (CBRC), which supervises more than 4,000 banks with US$40 trillion in assets, according to a Chinese State Council reform plan submitted yesterday to the annual session of the Chinese National People's Congress.

When the plan is passed, the cabinet will consist of 26 ministries and commissions in addition to the General Office of the State Council.

The function of making important laws and regulations of CBRC and CIRC will be transferred to the People's Bank of China as the central bank takes on a bigger role.

China is in a middle of battle against financial risk, as credit in the world's second largest economy has exploded since the financial crisis a decade ago.

Since the beginning of previous year, Beijing has cracked down on leverage and risky market practices, with China's financial regulators releasing a flurry of new rules in an attempt to rein in risks. Among the new entities were the ministry of natural resources, ministry of veterans affairs and ministry of emergency management.

On Sunday, the parliament voted to amend the constitution to remove presidential term limits, opening the way for President Xi Jinping to rule indefinitely.

The new body will decide on antimonopoly and pricing issues, replacing the roles played by the three national antitrust regulators: the National Development & Reform Commission (NDRC), the Ministry of Commerce and the State Administration for Industry and Commerce (SAIC).

Compared with the current setup, the number of ministerial-level entities are reduced by eight and that of vice-ministerial-level entities by seven, the report said.

China is also establishing a national market supervisory management bureau to ensure a "fair competition market environment".

Other reports by Click Lancashire

Discuss This Article