BEIJING (AP) – China’s government announced plans Tuesday to create a newly powerful regulator to oversee scandal-plagued banking and insurance industries as they try to reduce debt and financial risk.
The move is in line with the ruling Communist Party’s efforts to gain more direct control over the state-dominated economy and reduce financial risk following a run-up in debt that prompted global rating agencies to cut Beijing’s government credit rating last year.
The new agency, a merger of separate Cabinet bodies that oversee banks and insurers, will be charged with “preventing and dissolving financial risks,” said the plan submitted to the ceremonial national legislature for endorsement. It did not mention the third financial regulator, which oversees the securities market.
Separately, the plan also calls for creating a national market regulator, drawing in anti-monopoly, pricing and other powers from food and drug, industry and product quality agencies.
Beijing has launched a series of regulatory overhauls over the past two decades, creating and merging agencies, to respond to the growth of China’s vast, state-owned banking, insurance and finance industries.