Li Yunze, Director of the State Administration of Financial Supervision and Administration, stated that efforts will be made to continuously enhance the level of openness of the financial industry to Hong Kong and Macao
Source: China Securities Journal
On November 19th, Li Yunze, Director General of the State Administration of Financial Supervision, stated at the International Financial Leaders Investment Summit that since its establishment, risks in key areas have steadily converged. Next, the State Administration for Financial Regulation will continue to enhance the level of openness of the financial industry to Hong Kong and Macao, actively support the construction of Hong Kong's headquarters economy, further improve the communication mechanism between the two regions' financial supervision, and support foreign institutions in China to participate more comprehensively and deeply in the Chinese financial market.
The overall operation of the banking and insurance industries is stable
Li Yunze stated that currently, the total assets of the financial industry in mainland China are about 490 trillion yuan, with the banking and insurance industries ranking first and second in the world in terms of scale. The overall operation is stable and the risks are generally controllable. The total capital and provisions of the banking industry are about 50 trillion yuan, and the comprehensive solvency adequacy ratio of insurance companies is 196%. The main "health check indicators" are in the healthy range, especially the national bank capital adequacy ratio of nearly 16% and the provision coverage ratio exceeding 240%, which can fully cope with various risk challenges calmly.
Since its establishment, the State Administration for Financial Regulation has adhered to the principles of reform to increase vitality, development to solve problems, and incremental stock accumulation, steadily converging risks in key areas, "said Li Yunze.
We will orderly promote the reform of insurance for small and medium-sized financial institutions, formulate risk disposal plans for each province, and make substantial progress in the disposal of high-risk institutions in key areas. The reform of rural credit cooperatives and village banks will be steadily implemented. Effectively promote the stable and healthy development of the real estate market. We will establish a coordination mechanism for urban real estate financing in conjunction with relevant departments, highlighting the principle of "city as the main body and project as the center", gradually expanding the coverage, and introducing a series of policies such as lifting purchase restrictions, sales restrictions, and reducing down payment ratios. As a result, market confidence has significantly improved. In October of this year, the transaction volume of newly-built commercial housing in China stopped falling and rebounded. The transaction volume of second-hand housing increased year-on-year for seven consecutive months, and the real estate development prosperity index rose for six consecutive months. Actively support the resolution of local government debt risks. The recently introduced package of debt policies, such as the 6 trillion yuan limit on local government debt, will effectively alleviate the pressure of local government debt. The State Administration for Financial Regulation guides financial institutions to actively carry out debt restructuring, extension, and replacement in accordance with the principles of marketization and rule of law, orderly reduce the scale of existing debt, and promote the transformation of local financing platforms.
Deepen the cooperation in elderly care finance between the two regions
Li Yunze stated that in the next step, the State Administration for Financial Regulation will strongly support Hong Kong in consolidating and enhancing its unique position and advantages under the "One Country, Two Systems" system, maintaining long-term financial prosperity and stability, and achieving better development in the process of integrating into the overall national development.
One is to continuously improve the level of openness of the financial industry to Hong Kong and Macao. Complete regulatory adjustments related to the new opening measures of CEPA as soon as possible and promote the implementation of relevant examples. Explore and promote the interconnection of regulatory mechanisms and rules, and study and formulate policy measures to enhance the facilitation level of financial services in the Greater Bay Area.
Secondly, actively support the construction of Hong Kong's headquarters economy. Encourage Chinese banks and insurance institutions to establish overseas regional headquarters in Hong Kong. Support banks and insurance institutions in both regions to strengthen comprehensive cooperation and provide one-stop financial services for Chinese enterprises to "go global".
The third is to assist in the construction of the Hong Kong International Risk Management Center. Support more mainland insurance companies to issue catastrophe bonds in Hong Kong and accelerate the development of the international reinsurance market in Hong Kong. Encourage Chinese banks in Hong Kong to participate in the construction of the Hong Kong International Gold Exchange.
Fourthly, deepen the cooperation in elderly care finance between the two regions. Promote cross-border pension insurance cooperation in the Greater Bay Area to serve the elderly care needs of Hong Kong residents heading north. Support cooperation between insurance institutions in both regions to develop cross-border medical insurance products.
The fifth is to support Hong Kong in cultivating and developing new quality productive forces. Promote deep cooperation between banks and insurance institutions in emerging fields such as green and low-carbon, artificial intelligence, and support Hong Kong in building an international innovation and technology center.
The sixth is to work together to address risks and challenges. Further improve the communication mechanism for financial supervision between the two regions, strengthen exchanges and cooperation in responding to cross-border risks and crisis management, improve relevant risk response arrangements, and fully support the safe and stable operation of Hong Kong's financial industry.
No matter how the international situation changes, the door for China's financial industry to open up to the outside world will only open wider and wider. The State Administration for Financial Regulation will continue to deepen the high-level opening up of the financial industry, focus on creating a market-oriented, rule of law, and international business environment, and support foreign-funded institutions in China to participate more comprehensively and deeply in the Chinese financial market, "said Li Yunze.