China's banking regulator vows to tackle risk and support strategic industries

China's top banking regulator vowed on Wednesday to prevent systemic financial risk and channel resources to emerging industries, as the country undergoes a painful economic restructuring.

Ding Xiangqun, newly appointed head of the National Financial Regulatory Administration, expressed confidence that regulators will prevent risk from small financial institutions and resolve risk from real estate and local government debt.

"In recent years, cross-border transmission and cross-market spread of financial risks have become increasingly pronounced," Ding told the annual Lujiazui Forum in Shanghai.

Regulators will "encourage institutions to raise capital through multiple channels to enhance their risk resilience," Ding said.

China's economy is witnessing increasing imbalance, with consumption weak and the property sector struggling, but investment is hot in emerging sectors such as robotics and AI.

Reflecting the two-speed economy, China's retail sales in May fell for the first time in over three years and investment slumped, while industrial output picked up pace.

Ding said regulators will guide financial resources to emerging and future industries, and step up regulatory cooperation in emerging areas.

Authorities will also crack down on disorderly competition and prevent illegal financial activities, Ding said.

Reuters

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