Opinion
Stricter Supervision, Bigger Role
Financial holding groups ready to serve the real economy
By Deng Yaqing  ·  2018-11-28  ·   Source: | NO.49 DECEMBER 6, 2018
The first Everbright-Guanghua Forum on Financial Holding was held in Beijing on November 11 (COURTESY PHOTO) 

The first Everbright-Guanghua Forum on Financial Holding, which was jointly hosted by China Everbright Group and Guanghua School of Management of Peking University, was held in Beijing on November 11. As detailed supervisory measures will be released for financial holding groups in the near future, a number of financial regulators, entrepreneurs and scholars expressed their views on exploiting financial holding groups' advantages to serve the real economy, forging their global competitiveness and contributing to China's high-quality development.

A financial holding group is a financial institution engaged in banking-related activities offering customers a wide range of services, including insurance underwriting, securities dealing, commercial banking, securities underwriting, and investment advisory services.

 

Gu Shengzu, Vice Chairman of the Chinese People's Political Consultative Conference National Committee (COURTESY PHOTO)  

Gu Shengzu, Vice Chairman of the Chinese People's Political Consultative Conference National Committee, pointed out that China's economy has completed the transition from high-speed to high-quality growth. To advance high-quality growth, financial holding groups should be geared toward bolstering the real economy, boosting the private sector, encouraging innovation and ensuring financial security.

 

Gong Qihuang, Vice President of Peking University (COURTESY PHOTO)  

Gong Qihuang, Vice President of Peking University, said China is ushering in a new era by moving from speed-oriented to quality-oriented growth. Further progress should be made in pushing forward reforms with regard to major sectors and key links, including the development of financial holding groups.

 

Li Xiaopeng, Chairman of China Everbright Group (COURTESY PHOTO)  

Li Xiaopeng, Chairman of China Everbright Group, expressed his views on the development of financial holding groups. He suggested these groups should take serving the real economy as their ultimate mission while preventing excessively risky financial products, ensure their operation in compliance with regulations and rules, focus on maintaining a balance between risk and efficiency as well as development and capacity, and encourage the expansion of all affiliated industries, both real and otherwise.

Li was expecting to see the promulgation of special supervisory measures for financial holding groups, so that they can have their operation activities standardized, refining the modern financial system and keeping away from systematic financial risks.

He also spoke about the experience of China Everbright Group—build "three lines of defense" to prevent risks and "four firewalls" to isolate risks.

More specifically, "three lines of defense" include marketing, examination and approval, and independent audit respectively, while "four firewalls" mean that financial holding groups should not blindly pursue scale and speed, one-sidedly seek to be all inclusive, or pursue unnecessary expansion beyond their capabilities, and improve business information disclosure of connected transactions.

 

Zhu Hexin, Deputy Governor of the People's Bank of China (COURTESY PHOTO)  

Zhu Hexin, Deputy Governor of the People's Bank of China, stressed that China's financial sector should improve its capacity to serve the real economy. As a major component of China's financial system, financial holding groups better fulfill demands of diversified financial services from various enterprises and consumers, through comprehensive resource allocation, integrated services, and risk management and control.

 

Cao Yu, Vice Chairman of China Banking and Insurance Regulatory Commission (COURTESY PHOTO)  

Cao Yu, Vice Chairman of China Banking and Insurance Regulatory Commission, expressed that financial holding groups should further push forward reform and realize healthy self-development.

First, the financial regulator will lay an emphasis on gearing finance toward serving the real economy, and equal importance will be also attached to prevent financial risks. Second, financial holding groups need to properly tackle the balance between quality and scale as well as collaboration and isolation. Third, supervision and coordination of financial holding groups should be strengthened.

 

Li Jianhong, Chairman of China Merchants Group (COURTESY PHOTO)  

Li Jianhong, Chairman of China Merchants Group, held that financial holding groups should make efforts in three ways. First, priority should be given to risk management. Second, collaboration should be strengthened to generate synergy. Third, innovation is the major driving force behind growth, with financial innovation and technology upgrading the financial industry.

 

Kong Dan, President of CITIC Foundation for Reform and Development Studies (COURTESY PHOTO)  

Kong Dan, President of CITIC Foundation for Reform and Development Studies, suggested special legislation, supervision mechanisms and unified financial risk management and control standards for financial holding groups.
Shen Rujun, Vice President of China Investment Corporation (COURTESY PHOTO) 
Shen Rujun, Vice President of China Investment Corporation, noted that financial holding groups should play to their advantage of comprehensive finance when contributing to economic transformation. To make comprehensive finance a reality, they should intensify business collaboration, and strategic management and control.

 

Wu Fulin, member of the Party Committee of Bank of China (COURTESY PHOTO)  

Wu Fulin, member of the Party Committee of Bank of China, expressed his views in three ways. First, China has reached a high level of comprehensive finance in the past four decades of reform and opening up, with its financial assets gradually taking on features of financial capital. Second, institutional changes, market innovation and accelerating technological reform are engines driving the development of comprehensive finance and structural changes. Third, institutional innovation and policy supply should be made available to financial holding groups to enhance the competitiveness of comprehensive finance.
Liu Qiao, Dean of Guanghua School of Management of Peking University (COURTESY PHOTO) 
Liu Qiao, Dean of Guanghua School of Management of Peking University, suggested that instead of pursuing scale expansion of financial assets, China needs to conduct some distinctive innovations, so that capital can be better allocated to sectors and enterprises which can realize a higher rate of return.

Copyedited by Craig Crowther 

Comments to dengyaqing@bjreview.com  

China
Opinion
World
Business
Lifestyle
Video
Multimedia
 
China Focus
Documents
Special Reports
 
About Us
Contact Us
Advertise with Us
Subscribe
Partners: China.org.cn   |   China Today   |   China Pictorial   |   People's Daily Online   |   Women of China   |   Xinhua News Agency   |   China Daily
CGTN   |   China Tibet Online   |   China Radio International   |   Global Times   |   Qiushi Journal
Copyright Beijing Review All rights reserved 京ICP备08005356号 京公网安备110102005860