In a speech at the two-day National Financial Work Conference, which ended on Saturday in Beijing, President Xi Jinping emphasized three key tasks of the financial sector: strengthening its ability to serve the economy, preventing systemic risks and deepening financial reform. Xi called for greater accountability for financial regulators at the meeting, saying it would be "negligence of duty" if regulators fail to identify risks in time, and it would be "malfeasance" if they fail to report and contain the identified risks.
The financial meeting, held every five years, was considered a tone-setting gathering for China's financial policies and reforms in the coming years.
"We need to continue to utilize foreign investment to push forward supply-side reform and elevate our economy to catch up with the global innovation pace", Xi said.
The financial sector should improve service efficiency and quality and channel more resources into major and weak areas of economic and social development, he said.
Developing direct financing will be prioritized while indirect financing structure should be optimized by accelerating strategic transformation of state-owned major banks and developing small and medium-sized banks and private financial institutions, according to Xi.
The reiteration of the role of the financial sector points out the development direction of the financial sector and emphasis on direct financing is also quite reassuring for the stocks and bond markets, according to Li Huiyong, a senior analyst with Shenwan Hongyuan Securities.
Xi said Beijing will also strictly control new local government debt and strengthen oversight of internet financing.
The country will also resolutely deepen financial reforms including improving financial regulation coordination and shoring up weak links in supervision.
Lian Ping, chief economist at Bank of Communications, said such a committee will help improve the effectiveness of regulation and address challenges brought by increasingly mixed financial services.
Li said China will also increase efforts to improve the legal framework, credit mechanism and talent development for the financial sector to help the economy expand steadily.