Xi Story: Coordinating economic, financial work through integrated planning

BEIJING -- "When finance thrives, the economy thrives; when finance is stable, the economy is stable" -- a simple yet powerful statement that underscores President Xi Jinping's long-standing emphasis on the vital role of finance in ensuring China's economic strength and stability.

Xi's proposition is based on his many years of first-hand experience and in-depth thinking about the country's finance and economy.

China has a strong track record of using financial tools to bolster the real economy, as reflected in the country's recent drive to boost financing for technological innovation, green shift, small and medium-sized enterprises, rural areas and elderly care.

At a study session on promoting high-quality development of the financial sector in early 2024, Xi, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, urged officials at all levels to improve their financial acumen and capabilities and emphasized the importance of holistic and strategic thinking in coordinating economic and financial work.

Xi's vision for the relationship between the economy and finance was evident in his work experience long before he became China's top leader. Notably, during his more than 17 years in the eastern coastal province of Fujian, Xi led a series of forward-looking and innovative initiatives that laid the groundwork for what he describes as a "financial development path with Chinese characteristics."

In 1986, when Xi was vice-mayor of Xiamen -- a special economic zone -- he took charge of crafting the city's 1985-2000 economic and social development strategy, the country's earliest 15-year-term regional blueprint formulated by the local authorities. Notably, it dedicated a chapter to financial sector development that includes putting forward the concept of "offshore finance."

Under his guidance, Xiamen broke new ground by establishing the first special economic zone financial framework, pioneering foreign debt use for infrastructure, and launching the Xiamen International Bank, the first China-foreign joint venture bank in the country.

Xi's endeavor to develop the finance sector centers around one major goal: serving the real economy, which includes meeting the financing demands of manufacturing, infrastructure, and private enterprises.

Xiamen is the first special economic zone in China to build an airport and establish an airline. When Xi worked in Xiamen, he spearheaded a government task force to borrow funds from Kuwait and personally led teams to negotiate and secure a loan for expanding the city's airport.

In 1996, upon learning that Fujian-based Fuyao Glass was facing a critical funding shortage, Xi directed the local government to coordinate an equity swap that helped the company secure investment. Today, Fuyao Glass is a leading automotive glass manufacturer, supplying major automakers such as Ford and Volkswagen.

While attuned to finance's role in economic support, Xi is also acutely aware of the risks posed by unregulated financial activities.

He has stressed that financial regulation must be "sharp and tough," calling for resolute measures to combat corruption and guard against moral hazards during risk treatment.

In 1988, financial chaos related to unregulated private financing erupted in Fujian's Ningde, threatening social stability as it affected over 20,000 people and involved more than 100 million yuan (about $13.94 million). Xi responded with calm analysis and directed local authorities to crack down on illegal activities, gradually taming the turmoil.

"China's path of financial development follows the objective laws of modern finance while also embodying distinct characteristics suited to our national conditions. It is fundamentally different from Western financial models," Xi once said.