China appoints head of powerful new financial watchdog as industry faces heightened scrutiny

By Laura Ho, CNN

China has named the head of its powerful new financial watchdog as part of the comprehensive reform designed to contain A $60 trillion industry.

Li Yunze, a career banker who has worked in China’s state-owned banks for decades, will become party secretary of the National Financial Regulatory Authority (NFRA), according to a government announcement on Wednesday.

NFRA was established in March when Chinese President Xi Jinping announced its establishment The government’s biggest reform for decades. A key part of the reform is the creation of an expanded financial regulator that will oversee all financial activity except the securities industry.

The regulator will replace the existing China Banking and Insurance Regulatory Commission, which oversees commercial banks and insurance companies. It will also take over some responsibilities of the central bank and securities regulators, such as managing financial holding companies and protecting investor and financial consumer rights.

Li, 52, is currently vice-governor of Sichuan, a southwestern province with a population of 84 million.

Li graduated from Tianjin University and worked for China Construction Bank, the second largest bank by assets, for more than 20 years, rising from a branch employee to the head of the Chongqing office.

In 2016, he left the bank to become vice president of Industrial and Commercial Bank of China, China’s largest bank. In 2018, he served as the vice governor of Sichuan Province, in charge of financial and commercial work.

It is not uncommon for Communist Party officials to hold different positions at different times State-owned organs.

Currently, several provincial leaders have served in the financial industry, including Wu Qing, vice mayor of Shanghai and former chairman of the Shanghai Stock Exchange.

China’s sprawling financial sector is coming under greater scrutiny as Xi and his key allies assert greater direct control over financial policy.

For years, Mr. Xi has said the financial industry should better serve the real economy, including providing capital to businesses in need.With the current economic more and more challenges, What matters to Xi is that the industry fits his goals, including directing funds to key industries and Curb the risk of local debt.

Sweeping government reforms in March reflected his belief that China needed a more centralized system of governance to address domestic and foreign challenges. He has tightened his grip on the financial system and appointed close aides, including Premier Li Keqiang and Vice Premier He Lifeng, to oversee economic and financial policy.

To further consolidate control, the top anti-corruption agency has launched, according to analysts, A comprehensive anti-corruption campaign In the financial industry, more than a dozen executives of state-owned financial institutions have been trapped.

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