China’s ‘two sessions’ 2023: Beijing responds to US tech curbs, financial risks with sweeping regulatory shake-up

Beijing will create a new oversight body for parts of the finance sector, strengthen the science and technology ministry, and establish a new data regime

The restructuring fits President Xi Jinping’s efforts to fortify China against what he sees as growing external uncertainties and a domestic economic slowdown

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Xiao Jie, secretary general of the State Council. Photo: AFP

Published: 5:56pm, 7 Mar 2023Updated: 9:30am, 8 Mar 2023

China said on Tuesday it would establish a super regulatory body to oversee the country’s 400 trillion yuan (US$57.7 trillion) worth of banking and insurance assets, part of a sweeping reform plan Beijing hopes will strengthen capabilities to control risks and counter external headwinds.

The new National Financial Regulatory Commission will incorporate the China Banking and Insurance Regulatory Commission and absorb the central bank’s supervisory body for financial holding companies and the securities regulator’s investor protection function, according to a draft plan submitted to the National People’s Congress.

The reshuffle is just one of the State Council’s broader restructuring plans, which include an empowered role for the Ministry of Science and Technology to counter US technological containment and creation of the National Data Bureau to help the digital economy.

It is the third major restructuring since President Xi Jinping took office in 2013, with the last in 2017-19 leading to the establishment of the Financial Stability and Development Commission and the veterans affairs ministry.

The full extent of changes, potentially involving Communist Party institutions, is expected to be unveiled over the course of the “two sessions” as Xi looks to consolidate his leadership.

The changes fit the president’s efforts to fortify China against what he sees as a fast-changing world marked by growing external uncertainties, as well as a domestic economic slowdown.