China fully capable of forestalling systemic risks
Chinese Premier Li Keqiang on Monday expressed strong confidence in the nation's ability to prevent systemic risks.
"We are fully capable of forestalling systemic risks," Li said in a government work report delivered to the first session of the 13th National People's Congress, citing sound fundamentals of the Chinese economy and the many policy tools at disposal.
China's economic and financial risks are on the whole manageable, Li said. "What China needs to do is to tackle both symptoms and root causes and take effective measures to defuse potential risks," he said.
Li vowed serious crackdown on activities that violate the law like illegal fundraising and financial fraud.
The country will strengthen coordination in financial regulation, improve regulation over shadow banking, internet finance, and financial holding companies, and further improve financial regulation, he said.
Li stressed forestalling and defusing the local government debt risk. "All forms of borrowing and debt underwriting that violate the law and regulations are strictly prohibited. Provincial-level governments should assume overall responsibility for debts incurred by local governments within their jurisdictions; governments below the provincial level should live up to their own responsibilities; and all must take active, prudent steps to deal with outstanding debt."
The premier promised to improve the standard mechanisms for local governments to secure financing, noting that this year, local government special bonds issued will total 1.35 trillion yuan (US$213 billion), an increase of 550 billion yuan year on year.
The special bonds will "be used as a matter of priority for financing the smooth implementation of ongoing projects; and the scope of the use of special bonds will be appropriately expanded," he said.