BEIJING (Reuters) - China must strengthen regulatory oversight and control the overall amount of money supply to guard against mounting financial risks in the economy, a top economic official said on Sunday.
Yang Weimin, the deputy director of the Office of the Central Leading Group on Financial and Economic Affairs, said the “extremely arduous” task was necessary to head off the financial risks in the Chinese economy that were becoming “progressively visible”, according to the Securities Times business newspaper.
“Firstly, the overall money supply must be controlled, and the printing of money cannot be excessive,” the Securities Times quoted Yang as saying on the sidelines of an annual meeting of the Chinese People’s Political Consultative Conference, the Communist Party’s largely ceremonial advisory body to parliament. “Furthermore, there should be stronger oversight rather than the relaxation of financial oversight.”
Among a raft of major issues that needed to be tackled to combat financial risk were the continued reduction of overcapacity and ‘zombie companies’, controlling debt levels and keeping property markets stable, Yang said.
Beijing’s willingness to curtail big-spending conglomerates as it cracks down on financial risk was dramatically demonstrated in the past fortnight, when the government took control of Anbang Insurance Group Co Ltd ANBANG.UL and prosecuted its chairman.
The South China Morning Post reported on Friday that a Shanghai government agency has taken control of CEFC China Energy, the private firm that has agreed to buy a $9.1 billion stake in Russian oil major Rosneft (ROSN.MM). CEFC denied the report and said it was running its operations as normal.
Reporting by Philip Wen; Editing by Simon Cameron-Moore