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Xi's risk-off push ripples through China as transition nears

Bloomberg Published on Wed, Jul 19, 2017 / 12:13 PM GMT+8

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(July 19): China’s push to rein in financial risks is rippling through the economy, with regulators targeting everything from corporate acquisitions to returns on the savings products banks sell to yield-hungry consumers.

On Tuesday, Bloomberg reported that the banking regulator had told lenders to lower interest rates on wealth-management products, a popular vehicle for domestic savers, after yields in the US$4 trillion ($5.5 trillion) industry jumped in past months. Officials also extended their campaign against risky overseas acquisitions, with conglomerate Dalian Wanda Group Co. coming under scrutiny after a deals spree.

The two developments dovetail with the theme of the past weekend’s top-level financial conference in Beijing: As President Xi Jinping prepares for a twice-a-decade leadership transition this fall, authorities will take a dim view of anything that clashes with their efforts to contain risks in the financial sector. The central bank will take a lead role in administering a cabinet-level regulatory committee that was unveiled at the conference.