China’s Central Financial Commission: Consolidating Power and Addressing Economic Troubles

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By georgeskef

  • Beijing plans to establish a Central Financial Commission to oversee the country’s financial sector.
  • The commission aims to address China’s economic troubles, including the struggling real estate industry and mounting debt.
  • The move consolidates power under President Xi Jinping and the Communist Party, weakening established government groups.
  • The new commission will also play a role in major business deals and joint ventures.
  • This is part of a broader trend of increasing national security and party control in China’s economy.

China’s financial sector is getting a new leash with the establishment of a Central Financial Commission. The commission will serve as a watchdog, decision-maker, and regulator for the country’s $61 trillion financial sector. It aims to address China’s economic troubles, which include a struggling real estate industry, mounting debt, and waning investor confidence. Under President Xi Jinping and the Communist Party, the commission will consolidate power and weaken established government groups like the People’s Bank of China and the China Securities Regulatory Commission.

The real estate industry, once a booming sector and job creator, has fallen into disarray in recent years. Beijing’s imposition of borrowing limits on real estate firms has led to falling new home prices, a surplus of vacant apartments, and major developers like Evergrande and Country Garden facing massive debts. With the establishment of the Central Financial Commission, the Communist Party aims to deleverage the real estate sector, tackle corruption and speculation, and shore up the finances of indebted local governments.

The move to establish the commission reflects President Xi’s desire for greater control over China’s financial sector and the country’s overall economy. In recent months, the Communist Party has been focused on national security and extending its influence, while the economy has taken a back seat. This has led to actions like the raiding of foreign businesses’ offices and accusations against Western countries of attempting to steal sensitive information from Chinese businesses. The establishment of the commission is part of a broader trend to de-westernize China’s economy and strengthen party control.

Overall, this move signifies a further consolidation of power in China’s financial sector under President Xi Jinping and the Communist Party. It remains to be seen how the Central Financial Commission will navigate the challenges facing China’s economy, particularly in the real estate industry. Investors will be closely watching the actions of the commission and the impact they have on China’s financial landscape.

Hot Take:

The establishment of the Central Financial Commission in China marks a significant shift in power within the country’s financial sector. With President Xi Jinping and the Communist Party at the helm, the commission aims to address economic troubles and consolidate control. While this move may provide a sense of stability and centralization, it also raises concerns about potential overreach and the blurred lines between party and government. As China continues to assert itself on the global stage, investors and businesses will need to carefully navigate the evolving landscape and consider the implications of party influence in their operations.