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Morning Message from South China
China punishes five lenders in another move aimed at rooting out market failures and taming financial risks
China has penalized five of the country’s lenders in yet another wake-up call to the industry to root out faults and contain financial market risks to bolster economic recovery. The China Banking and Insurance Regulatory Commission (CBIRC) fined lenders a total of 366 million yuan ($ 56.8 million) for violating a myriad of rules and regulations, it said. she said Friday in a statement. He also pledged to step up the pressure to maintain financial stability. The move signaled an escalation in state enforcement action following a series of moves across various industries over the past six months. Among other things, authorities fined five lenders in September for irregularities, imposed a record fine on Alibaba Group Holding (the owner of this newspaper) in April, launched an investigation into the operator of the platform of Meituan food delivery on its market practices and have recently taken steps to suppress it. on the manipulation of the stock markets by pumping and dumping. Do you have questions on the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new curated content platform with explanations, FAQs, analysis and infographics brought to you by our award-winning team. In Friday’s announcement, Huaxia Bank was fined 98.3 million yuan for failing to comply with the disclosure of its wealth management products and for insufficient warning to customers about the potential risk of the products. investment. Locals walk past a Huaxia bank in Shanghai. The lender was sentenced to two fines in eight months for irregularities. Photo: Reuters alt = Residents walk past a Huaxia bank in Shanghai. The lender was sentenced to two fines in eight months for irregularities. Photo: Reuters China Bohai Bank was fined 97.2 million yuan for selling wealth management products under trust fund schemes assembled to unqualified clients, as well as for mismanagement of bank acceptance invoices. The Bank of China, China Merchants Bank and the Chinese branch of the Bank of East Asia were also tried and sanctioned, the statement said. “The CBIRC will maintain strong pressure on violating laws and regulations,” the regulator said, adding that it would continue to crack down on irregularities in the financial sector that could harm the real economy. The CBIRC had previously fined five other lenders – namely China Minsheng Bank, China Zheshang Bank, Huaxia Bank, Guangfa Bank and China Huarong Asset Management – a total of 320 million yuan in September for irregularities in market. At last month’s Politburo meeting, chaired by President Xi Jinping, political leaders urged his agencies to address economic loopholes, including uneven growth, deep financial risks and technological challenges, to entrench the economic recovery of the country after the coronavirus. The meeting underscored the importance of further regulation of internet platform companies, continued crackdown on speculation in the real estate market, and protection of the country’s limited arable land, among others. China, the world’s second largest economy, posted a record 18.3% increase in gross domestic product in the first quarter, from a weak base a year earlier when production was decimated with plant closures at the start of the Covid-19 pandemic. The economy grew 2.3% in 2020, the slowest in 45 years. Authorities have been on high alert for increasing domestic financial risks while closely monitoring external uncertainties, including side effects of foreign economic policies, supply chain disruptions and other measures. aimed at containing its technological progress. The government is also tasked with the local Communist Party and government officials overseeing a bad debt elimination mechanism to better cope with financial risks, such as low liquidity in the country’s small banks and increasing pressure to repay debt. local government debt. This article originally appeared in the South China Morning Post (SCMP), the most trusted voice reporting on China and Asia for over a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.