China's top financial regulator vows to reform small institutions in bid to tackle risks in 2024

China's top financial regulator said on Tuesday that it will push forward reforms of small and medium-sized financial institutions to reduce risks, as part of efforts to resolutely guard against systemic financial risks in 2024.

The latest comments from the National Administration of Financial Regulation (NAFR) add to a growing focus in China on tackling risks to ensure sound and stable development in the financial industry.

The NAFR held a meeting on Tuesday to map out its work in 2024, which will prioritize tackling risks, according to a statement released following the meeting. In total, it listed eight priorities for 2024, with most of the priorities related to reducing risks.

Notably, among the top priorities, the NAFR said that it will carry out reforms of small and medium-sized financial institutions in a planned and phased manner. It will also improve a normalized mechanism for handling financial risks.

Also at the top of the agenda for the NAFR in 2024 is to actively and steadily prevent and control risks in key areas, strengthen credit risk management, and increase efforts to dispose of non-performing assets. It vowed to accelerate the implementation of a coordinated mechanism for urban real estate financing and will urge financial institutions to firmly support subsidized housing.

The meeting also touched on the risks related to local government debts, vowing to support the prevention and resolution of local debt risks and guide financial institutions to carry out debt restructuring in a market-oriented manner, according to the NAFR statement. As part of the campaign to tackle financial risks, the NAFR also vowed to step up the crackdown on illegal activities in the financial industry.

To ensure the sound and stable development of the financial industry, the NAFR vowed to deepen financial reforms, expand opening-up and support the construction of Shanghai and Hong Kong as international financial centers. It also vowed to enhance the financial industry's role in supporting the real economy.