The regulators in China want the provinces to come up with their plans to deal with financial risks, as per a report just a month after the officials swore to put to work a mechanism to solve all the local debt issues.
The country needs to make a better effort when it comes to financial risk management. However, the risks must be tailored, and avoid sticking to just one approach that would fit all, as per Li Yunze, the head of the National Financial Regulatory Administration.
Each of the provinces has to come up with its own plan to deal with this crisis.
The second-largest economy in the world has struggled for traction this year as a bounce from the highly restrictive Covid Zero policies has proved to be softer than what was expected, and a crisis over property had dragged on.
That has promoted many successive waves of support from local and central authorities, however, some economists have argued that the government’s debt is now too focused on local levels.
On risk management, there is going to be “one province, one policy,” as Li had said. “Risk prevention and management are the eternal themes,” Li further added.
The agency will be focusing on looking into the people who are causing severe risks, pledging to intensify the apparent rectification of chaos and unruly behavior within the markets.
In late October, the two-day Central Financial Conference, which was attended by the Chinese President Xi Jinping, swore to optimize the debt structure of the local and central governments. At this meeting, the officials had also pleaded to bring up a process that would help resolve the risks of debt that are tied to the local authorities. Li said, “China will also set up a mechanism to resolve disputes over consumption, as well as another on protecting consumers’ rights.”