Reuters previously reported that Beijing was planning to resurrect an elite party financial watchdog that operated between 19 to increase political control over the financial sector. 'The line between the party and the government has become decisively blurred, so there is no way that the new financial watchdogs will contradict with what the party wants,' said Yan Wang, chief China strategist at Alpine Macro, a global investment firm based in Montreal.

The reorganisation of party and state-run financial bodies comes after Xi Jinping secured a precedent-breaking third term as party leader in October and also a new term as president earlier this month, making him China's most powerful leader since Mao Zedong. To strengthen the ideological and political role of the party in China's overall financial system, a separate Central Financial Work Commission will also be established. The new watchdog will be responsible for the top-level design, development and supervision of the financial sector, strengthening 'unified leadership on financial work', according to a plan published by state media.

The creation of the Central Financial Commission will see the dissolution of the state-run Financial Stability and Development Committee (FSDC), a powerful body set up in 2017 and headed by former vice-premier Liu He to curb risks in China's complex and often opaque financial system.

The banking and insurance regulator will be abolished, and certain functions of the central bank and securities regulator will be transferred to the new financial administration.īEIJING (March 16): China will set up a financial watchdog run by the Communist Party, state media reported on Thursday, as part of a broad reorganisation of governing bodies set to give the ruling party direct control and supervision over financial affairs.

Financial watchdog