Opinion: China’s Latest Financial Overhaul Marks Shift From U.S. Model, but Risks Remain

Plans to overhaul departments of the State Council will essentially reverse the financial sector reforms of the 1990s, which emulated the U.S. model. Photo:VCG

This year’s national “Two Sessions” unveiled a plan to overhaul departments of the State Council, with two major changes related to the financial regulatory system.

First, to establish the State Financial Regulatory Administration to replace the China Banking and Insurance Regulatory Commission (CBIRC). The new regulator will also take over day-to-day supervision of financial holding groups from the People’s Bank of China (PBOC), the country’s central bank. Second, to abolish the PBOC’s nine regional branches and restore provincial-level branches.