By Wu Zhenyu & Tang Chao, Research Institute of Finance, DRC

Research Report, No.307, 2020 (Total 6051) 2020-12-18

Abstract: During the 13th Five-Year Plan period, China witnessed remarkable progress in preventing and resolving market financial risks and institutional risks, and additionally some achievements were made in institutional building and policy making. During the 14th Five-Year Plan period, outstanding financial risks need to be further addressed in an orderly manner. Meanwhile, some incremental financial risks will loom up due to the transformation of growth mode at home, the impact induced by COVID-19 pandemic, the adjustments of industrial and supply chains in the world as well as China-US strategic conflicts. Inbound financial risks will also increase prominently in China. Looking ahead, during the 14th Five-Year Plan period, China will face daunting pressure in risk prevention and control, making it necessary for us to enhance the awareness against risks and the bottom-line thinking. In the future, we need to address financial risks through disposing non-performing assets, taking steps for the exiting of high-risk institutions from the market, properly handling the real estate financial risks and local governments’ debt risks, and strengthening financial regulation and security. Besides, a long-standing mechanism for warding off financial risks needs to be established in the course of risk prevention and control.

Keywords: financial risks, financial regulation, financial security, 14th Five-Year Plan