Beijing warns China’s US$63 trillion financial sector: serve the real economy and enrich lives

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China’s financial sector needs to focus on supporting the real economy and must refrain from “fake financial innovation”, state media has proclaimed amid a tightening of regulations as Beijing seeks to flex its financial might.

In what is widely believed to be a warning against capital idling and speculative activities by banks and lending institutions, People’s Daily called for the 453-trillion-yuan (US$63 trillion) financial sector to be more dedicated to technological innovation, advanced manufacturing, green development and small enterprises.
Financial institutions should avoid “letting money circulate within the sector” for the sake of arbitrage, and should not allow themselves to be distracted from the real economy, the Communist Party mouthpiece said in a commentary on Friday.

The warning came as regulators toughened rules governing quant trading – which utilises strategies generated by computer algorithms and involves the rapid buying and selling of securities – while also addressing concerns over the fragility of the nation’s financial system against the backdrop of a local debt mountain, property slump and stock market chaos due to the pull-out of overseas capital.

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www.msn.com/en-xl/money/other/beijing-warns-china-s-us-63-trillion-financial-sector-serve-the-real-economy-and-enrich-lives/ar-BB1iLmSx

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