China has made progress in shrinking the business of trust companies, a key component of shadow banking, the China Banking and Insurance Regulatory Commission (CBIRC) said in a June 6 statement.
The total assets of the trust sector stood at Rmb25.41tr ($3.97tr) at the end of April, down 3.18% from the beginning of the year, said the CBIRC. There were Rmb8.39tr of outstanding trust loans, down Rmb11.1bn from the start of the year, and down Rmb847.8bn from this point last year. Trust loans to local government funding vehicles (LGFVs) and the financial sector came down by Rmb155.2bn in the same period.
The watchdog said it will continue to regulate the sector with on-site inspections and policy guidance, moving trust companies from fast growth to high quality growth, and through that, support the development of the real economy.
China will strike a balance between steadily pushing forward capital account liberalisation and preventing risk arising from cross-border capital flows, Pan Gongsheng, head of the State Administration of Foreign Exchange (Safe), told representatives from international corporations at a June 4 meeting.
American Chamber of Commerce in China, Bank of East Asia, BlackRock, Citi, Deloitte, Epson, Mizuho and Samsung sent representatives to meet with Pan.
The topic of internet security was on the agenda for the People’s Bank of China and Safe this week.
Given that finance is at the heart of the Chinese economy, defending internet security in the industry is part of the PBoC’s mandate to safeguard against systemic financial risk, officials at the central bank said at a June 6 meeting .
A t a meeting on Monday between Safe and the Ministry of Public Security, Pan said the two departments will work more closely together to crack down on underground banks and illegal FX trading platforms by exchanging information more frequently, issuing stricter punishment for such activities, and educating the public, according to a June 4 statement by Safe.