China advises state firms to keep eye on finances as risk becomes economic watchword
- China’s state assets supervisor has warned government firms to be mindful of financial risk as smaller banks, property firms report heavy debt loads
- Cautionary words show concerns over financial health not limited to institutions more local in scope
China’s state assets watchdog has identified four areas within enterprises run by the central government worthy of careful monitoring – trust companies, finance subsidiaries, private equity and commercial factoring – indicating a tendency towards risk control running deep throughout the country’s economy.
“[The central financial work conference] underscored the importance that each unit within state-owned enterprises confronts prominent issues,” the State-owned Assets Supervision and Administration Commission of the State Council (Sasac) said at a recent meeting.
Once risks surface, decisive action must be taken promptly to eradicate them in their infancy
“[The conference] firmly called for rectifying issues of formalism and bureaucracy, proactively preventing and resolving risks in the financial sectors of central enterprises,” the commission said in an online statement published Monday.
Sasac has already set up a leading group to manage the tasks deemed necessary for a thorough de-risking process.
“Overall risks in the corporate financial sector need to be comprehensively assessed, identified, warned, exposed and disposed of at an early stage,” the watchdog said.
04:49
Anger mounts as China's property debt crisis leaves flats unfinished
“Once risks surface, decisive action must be taken promptly to eradicate them in their infancy, establishing robust and enduring mechanisms to firmly secure the baseline.”
