THE government must strengthen regulatory oversight and control the overall amount of money supply to guard against mounting financial risks in the economy, a top economic official said late Sunday. Yang Weimin, the deputy director of the Office of the Central Leading Group on Financial and Economic Affairs, said the “extremely arduous” task was necessary to head off the financial risks in the Chinese economy that were becoming “progressively visible,” according to the Securities Times business newspaper. “Firstly, the overall money supply must be controlled, and the printing of money cannot be excessive,” Yang said. “Furthermore, there should be stronger oversight rather than the relaxation of financial oversight.” Among a raft of major issues that needed to be tackled to combat financial risk were the continued reduction of overcapacity and “zombie companies,” controlling debt levels and keeping property markets stable, Yang said. The government’s willingness to curtail big-spending conglomerates as it cracks down on financial risk was dramatically demonstrated over the past fortnight, when the government took control of Anbang Insurance Group Co. and prosecuted its chairman. The South China Morning Post reported Friday that a Shanghai government agency has taken control of CEFC China Energy, the private firm that has agreed to buy a US$9.1-billion stake in Russian oil major Rosneft. CEFC denied the report and said it was running its operations as normal. Other Chinese conglomerates with major overseas assets have also come under government scrutiny in recent months, buffeted by shifting policy winds. (SD-Agencies) |