The China Banking and Insurance Regulatory Commission recently held a national banking and insurance industry supervision and management conference in 2020. Guided by Xi Jinping’s new socialist ideology with Chinese characteristics, the conference fully implemented the spirit of the nineteen and nineteen second, third, fourth and fourth plenary sessions of the party and the central economic work conference of the party, reviewed the work in 2019, judged the current economic and financial situation, and deployed the work in 2020. Guo Shuqing, Secretary of the Party committee and chairman of the CIRC, attended the meeting and delivered a speech.
In 2019, under the firm leadership of the Party Central Committee with Comrade Xi Jinping at the core, the CIRC system resolutely implemented the decision-making and deployment of the CPC Central Committee and the State Council, and achieved remarkable results in various work. We will deepen efforts to strictly govern the party in an all-round way, keep in mind that the CBRC is first and foremost a political organ, strengthen its “four senses”, enhance its “four self-confidence” and take the lead in achieving “two safeguards”. We must conscientiously implement the important instructions of general secretary Xi Jinping, and ensure the implementation of the items and echo everything. We have carried out a solid education on the theme of “never forget your original intention and keep your mission in mind”. We have adhered to the problem-based approach, implemented reforms, and achieved tangible results. We will continue to uphold discipline, uphold discipline, and fight against corruption. We will implement the eight regulations and implementation rules of the Central Committee, introduce 20 measures to reduce the burden on the grass-roots level, and vigorously combat formalism and bureaucracy. We will dig deep into the root causes of corruption behind financial risks and resolutely crack down on corruption.
The meeting pointed out that key progress has been made in preventing and defusing financial risks. A total of 2 trillion yuan of non-performing loans were disposed in the whole year, and all loans overdue for more than 90 days by commercial banks were included in the management of non-performing assets. Shadow banking and cross financial risks continued to converge, and the scale of shadow banking dropped 16 trillion yuan from its historical peak in the past three years. The problematic financial institutions have been disposed in an orderly manner, and the key risks in the insurance field have been alleviated. The risk of online lending declined significantly, and the number of institutions, loan balance and participants declined for 18 consecutive months. The trend of real estate finance is slowing down, and the implicit debt risk of local governments is gradually resolved. The stock of market chaos has continued to decrease, the incremental problem has been curbed, and a number of major cases of illegal fund-raising have been severely investigated and dealt with.
The quality and efficiency of financial institutions in serving the real economy have been continuously improved. In 2019, RMB loans increased by 17 trillion yuan, an increase of 1.1 trillion yuan over the previous year. The balance of insurance fund utilization was about 18 trillion yuan, an increase of 9.5% over the beginning of the year. Private enterprise loans increased by 4.25 trillion yuan. The loan balance of inclusive small and micro enterprises was 11.6 trillion yuan, an increase of more than 25% year on year. The loan growth of inclusive small and micro enterprises of five large banks was more than 55%, and the comprehensive financing cost of newly issued inclusive small and micro enterprise loans fell by more than 1 percentage point.
The reform of key institutions and areas has been deepened, and the corporate governance mechanism has been further improved. 19 opening-up measures were newly launched, and 51 applications for the establishment and opening of insurance institutions of foreign banks were approved. To support Chinese funded enterprises going out, 11 Chinese banks have set up 80 first tier institutions in 29 countries along the belt and road. We will speed up the improvement of the regulatory system and issue 40 rules and regulations throughout the year. We will successfully complete the task of institutional reform, realize the transition from “physical integration” to “chemical reaction”, and fully release the momentum of reform.
The meeting stressed that to do a good job in banking and insurance supervision, we must adhere to the centralized and unified leadership of the Party Central Committee on financial work, and always achieve “two maintenance”. We must have the courage to face up to the problems and dare to fight, take the initiative to reveal the risks in the spirit of self revolution, and do everything possible to eliminate the hidden dangers. It is necessary to prevent the risk of disposal risk, to combine slow conditioning with surgical operation, and to achieve progress in stability, both symptoms and treatment. We must strengthen active communication and coordination, form joint forces and improve efficiency. We must divide the situation into different categories and implement policies according to the unified deployment of the financial committee of the State Council and specific analysis of specific problems. We must implement one policy for each region, one policy for each enterprise, and do not carry out “one size fits all” and “step by step”. We must further strengthen the concept of the rule of law, strictly abide by laws and regulations, supervise and administrate according to law, and deal with various market problems according to law.
According to the meeting, the current operation of banking and insurance industry is generally stable, and the main indicators are in a reasonable range. However, the risk situation is still complex and there are many uncertainties and instability, which need to be dealt with seriously and properly.
The meeting pointed out that 2020 will be the year of the completion of building a moderately prosperous society in an all-round way and the 13th five year plan, as well as the year of the end of the battle to prevent and resolve financial risks. We have great responsibilities, arduous tasks and glorious missions. The whole system should strive to promote the high quality development of Party building, take the political construction as the fundamental construction, and consciously implement the important instructions and general instructions of general secretary Xi Jinping and the major decisions and arrangements of the Party Central Committee. We will consolidate and expand the educational achievements on the theme of “never forget the original intention and keep the mission in mind”, pay close attention to the rectification of problems, and establish a long-term mechanism. We will comprehensively strengthen the construction of grass-roots party organizations and the ranks of cadres. We will give full play to the role of political inspection and supervision, support discipline inspection and supervision institutions at all levels to enforce discipline supervision, and keep supervision under strict supervision.
The meeting stressed that we should resolutely win the battle to prevent and defuse financial risks. Handle the high-risk institutions in a safe manner, consolidate the responsibilities of all parties, and do a good job in coordination, cooperation and policy guidance. Continue to dismantle the shadow banking, especially to reduce the high-risk shadow banking business, to prevent the resurgence. We will resolutely implement the requirements of “no speculation in housing”, strictly implement the regulatory rules such as credit concentration, and strictly prevent the illegal flow of credit funds into the real estate sector. For financial groups built in violation of laws and regulations, we should, on the premise of stabilizing the overall situation, seriously investigate and deal with violations of laws and regulations, make full efforts to clean up assets, recover stolen goods for losses, and reform and restructure. We will further promote the special rectification of Internet lending and increase the standardization of Internet insurance. We will continue to work with local governments to deepen the reform and restructuring of state-owned enterprises, accelerate the adjustment of economic structure, and resolve the hidden debt risks. We will effectively prevent and resolve external shock risks, do a good job in stress testing of banking and insurance institutions, improve response plans, and stabilize market expectations.
The meeting pointed out that we should vigorously do a good job in the “six stability” related work, promote the improvement of the quality and efficiency of the real economy of financial services, and guide more investment in key areas and weak links. We will press ahead with the promulgation of measures for supervision and evaluation of financial services for small and micro enterprises of commercial banks. The comprehensive financing cost of inclusive small and micro enterprise loans will be reduced by another 0.5 percentage points. The loan growth rate will be higher than the average growth rate of all loans. The loan growth rate of inclusive small and micro enterprises of five large banks will be higher than 20%. We will strengthen financial services for private enterprises, especially private manufacturing enterprises, give priority to supporting advanced manufacturing industries and industrial clusters, and focus on easing the liquidity difficulties of enterprises with market prospects. We will strengthen financial support in the field of social services and implement financial policies and measures to support pig production. We will help win the battle of poverty alleviation and pollution prevention and control, and strive to achieve a higher loan growth rate than the average loan growth rate of our provinces in areas of deep poverty such as “three regions and three prefectures”. We will vigorously develop green finance, launch a number of financial products that are conducive to environmental protection, and further improve the coverage and penetration of compulsory environmental pollution liability insurance.
The meeting called for deepening the structural reform of the financial supply side in an all-round way and improving the level of opening up. Guide the stable transformation of bank financing and trust industry, establish and improve the third pillar of pension security, and lay a solid foundation for the long-term sustainable and healthy development of the capital market while optimizing the financial product structure and institutional system. We will focus on the reform of small and medium-sized banks and rural credit cooperatives, and comprehensively deepen the reform of various types of bank insurance institutions. We will improve the market-oriented formation mechanism of commercial vehicle insurance rates, promote the construction of the reinsurance market, and expand the scope of catastrophe insurance pilot projects. We will further expand opening up to the outside world and accelerate the implementation of policies that have been issued. We will vigorously improve the equity structure, and encourage domestic and foreign professional institutions with outstanding main businesses, advanced management and excellent records to invest in Chinese banks and insurance companies. We will improve corporate governance, integrate the leadership of the party into all aspects of corporate governance, and establish and improve a modern enterprise system with Chinese characteristics and in line with the rules of the G20. We will comprehensively strengthen supervision over the quality of assets and liabilities, refine classification rules and improve the accuracy of asset classification on the basis of the existing five-level classification. We will work out measures to supervise the quality of liabilities as soon as possible, and improve the stability and matching of liabilities of banking and insurance institutions, especially small and medium-sized institutions. We will explore and improve the mechanism for the recovery and disposal of banking and insurance institutions, and work closely with relevant departments to determine the list of systemically important financial institutions in China. Distinguish systemically and non systemically important institutions and implement differentiated supervision. We will improve disposal procedures, consolidate responsibility for disposal, improve loss sharing mechanisms, and form a healthy and orderly financial governance system.
The meeting called on the Banking Regulatory Commission system to unite more closely around the Party Central Committee with Comrade Xi Jinping as the core, firmly establish “Four Consciousnesses”, strengthen “four self-confidence”, continue to carry out the “two maintenance”, work together, do solid work, and strive to create a new position in supervision work, making greater contributions to building a well-off society in an all-round way and realizing the great rejuvenation of the Chinese nation.