The China Banking and Insurance Regulatory Commission expects domestic banks to be more discerning when applying credit policies, said Chen Wenhui, the regulator's vice chairman.
"To support supply-side reform, [banks should] enhance and implement differentiated credit policies and support key industries that are in line with state strategy," the official told delegates at the Caixin Summit in Hong Kong June 8. An example of this strategy is to shift capital away from pollution-heavy industries, he said.
Chen also urged banks and insurance companies to focus on primary business operations, and work at improving internal management and risk controls, rather than diversifying into non-core sectors.
This follows a crackdown by the Chinese government on companies such as Anbang Insurance Group Co. Ltd., HNA Group Co. Ltd. and Dalian Wanda Group Corporation Ltd. that had in recent years splurged on acquisitions domestically and abroad. Some of the purchases were "irrational" and placed undue financial risks on the companies, it said.
For example, Chinese regulators including the CBIRC have taken over Anbang Insurance and are now reviewing its tens of billions of dollars in overseas assets.
Accelerating liberalization plans
Chen added at the conference the CBIRC is speeding up the formulation of detailed rules for the further opening up of domestic asset investment companies and insurers to foreign enterprises, in line with China's plans to liberalize its financial sector.
"I met with many CEOs of foreign financial institutions recently, and I asked them if they were ready [to enter the Chinese market]," he said.
"They said they are still studying [our policies]."
