Chinese reform researchers are still unsure about whether the country should create a financial super-regulator to oversee the banking, securities and insurance sectors, an official involved in drafting China’s latest cabinet reshuffling plan said Monday.
“The issue is quite complicated,” Wang Feng, deputy director of the State Commission Office for Public Sector Reform (SCOPSR), said at a press conference while explaining why the central government has refrained from reforming its current financial regulatory bodies in its latest institutional reform package.
He said policymakers have noticed that a financial regulator with mixed operations is a trend in other countries, compared with a single regulator supervising the banking, securities and insurance sectors, respectively.
China currently has the China Banking Regulatory Commission to oversee the banking sector, the China Securities Regulatory Commission to supervise the equity markets and the China Insurance Regulatory Commission to regulate the insurance sector.
“Should we change the existing method of regulation? We don’t know. Is it the time now? We don’t know,” Wang said, “So let’s take a cautious attitude and have a look first.”
He said resistance from groups with vested interest is inevitable in any reform.
SCOPSR has been widely involved in drafting a plan to restructure ministerial-level departments inside China’s cabinet. However, the possible creation of mega-ministries in the energy, culture and finance sectors is not on the State Council’s reform agenda.
The State Council on Sunday announced a plan to dismantle the Ministry of Railways, integrate the Ministry of Health and the National Population and Family Planning Commission and merge the country’s press and broadcasting regulators to oversee the press, publication, radio, film and television sectors, as well as reorganize the existing State Food and Drug Administration, the State Oceanic Administration and the National Energy Administration.
If the restructuring package is approved by the top legislature, the State Council will cut its ministerial departments to 25 from 27, as it has acknowledged that the government focused too much on micromanagement.