Published: Tue, March 13, 2018
Finance | By Loren Pratt

China To Create New Ministries, Merge Financial Regulators In Shake-Up

China To Create New Ministries, Merge Financial Regulators In Shake-Up

The proposed changes create new bureaus, do away with others, and shift around responsibilities.

China will merge its banking and insurance regulators and transfer some of their roles to the country's central bank People Bank of China (PBOC), according to a parliament document released today during the annual session of the National People's Congress.

The new regulator will be capable of "holding the bottom line to prevent systematic financial risk", the parliament document says. The central bank will deal with the macro, and the merged regulators will be responsible for the more specific part of thing.

China is among the global economies seen as most vulnerable to a banking crisis, the Bank for International Settlements (BIS) said at the weekend, though Beijing has maintained that debt risks are under control.

There will also be new administrations, such as an global development cooperation agency, a state immigration administration, and a banking and insurance regulatory commission.

"Deepening the reform of the party and state institutions is an inevitable requirement for strengthening the long-term governance of the party", Liu said in the commentary in the official People's Daily.

The latest cabinet shuffle shows the government's battle continues.

The new bureau will bring together a number of separate departments under one roof, regulating everything from businesses to quality supervision to food and drug safety, according to the document.

The proposed changes were discussed earlier in parliament Tuesday and are expected to be formally adopted on Wednesday.

The ministry shake-up also includes the creation of a new immigration management bureau and the restructuring of the national intellectual property rights bureau. Once this happens, the Cabinet will consist of 26 Ministries and Committees.

Such regulatory arbitrage and risky cross-asset investments have anxious policymakers.

The current National Health and Family Planning Commission and a leading group overseeing medical and healthcare reform under the State Council will no longer exist after the reshuffle.

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