How China Is Tackling Dangers in Its Financial System

China is getting real about the dangers lurking in its financial system. While de-risking has been the government’s mantra since 2015, the country’s most powerful politicians have been weighing in this year amid a flurry of directives on everything from excessive borrowing to speculation in equities. Those efforts have gained further momentum since October’s Communist Party Congress, where leaders renewed a pledge to make controlling financial risk a top priority. The challenge for authorities is to maintain financial stability while tackling the massive leverage they have singled out as a threat to economic health.

President Xi Jinping chaired a gathering to discuss “safeguarding national financial-market security” in April, a day after the worst losses this year in Shanghai-traded shares. The meeting was attended by members of the 25-person politburo, made up of the top politicians in China. While the central bank governor and the various regulators were also there, the fact the Communist Party’s premier decision-making body met and decided to act on financial risk suggests there’s consensus at the very top.