China crackdown on speculators
Print Edition
PRESIDENT Xi Jinping said yesterday China must “unswervingly” crack down on financial irregularities and illegal behaviors, while improving shortcomings in its market supervision.
Xi said the world’s second largest economy must make such reforms specific and according to international standards.
China would actively discuss how best to tackle its debt issues and fend off moral hazards this year, Xi said at an economic work meeting.
The country’s top leaders have criticized the flow of speculative funds into the property market, which recorded the fastest price gains last year since 2011. That has fueled a dangerous price bubble and inflated China’s debt load.
Xi said China would keep its property market stable by guiding real estate investment behaviors and market expectations, and adjust medium to long-term supply to the market.
To do this, China would establish a long-term mechanism to promote the healthy development of the property market, based on the belief that “houses are for living in, not for speculating.”
Xi also said China would deepen supply-side structural reform, emphasizing that tackling “zombie firms” was the key to reducing overcapacity this year.
The country would stick to the basic tone of “seeking progress while maintaining stability” in this year’s economic work to ensure stable and healthy development, Xi said at a meeting of the Central Leading Group on Finance and Economic Affairs.
It was the 15th conference of the leading group, which is headed by Xi. Premier Li Keqiang, the deputy head, also attended the meeting.
The country’s economic regulators reported their work plans in excess capacity cutting, financial risk control, property market regulation and the revival of the manufacturing sector.
“The government should make more efforts to guarantee subsistence allowance and re-employment for those laid-off, and grab effective methods to dissolve corporate debts and prevent moral hazard,” Xi said. “China will accelerate building a supervision coordination mechanism and strengthen macro-prudential regulation to prevent systemic risks.”
He also pointed out the role that financial supervision could play in improving the economy.
“Financial supervisors should fix weak links and act hard against illegal activities,” he said, calling for reform and innovation to help the financial sector to better serve the real economy.
Xi stressed quality in reviving the manufacturing sector, saying the sector should shift from the expansion of quantity to the improvement of quality.
“China will channel more energy into reducing prices and administrative fees in monopolized sectors and strive to lower business burdens,” Xi added.
During the meeting, policy-makers discussed the work report of the leading group, which has rolled out more than 400 measures to improve economic regulation since 2012.
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