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China has kickstarted a major reorganisation at the current annual session of the People’s Congress. The plans, which were presented during the legislative session on Tuesday, include creating a new national financial regulatory administration, reorganizing the Ministry of Science and Technology and creating a separate national authority to manage the increasing amount of data.
China’s president Xi Jinping had long planned a major reorganisation. This push is the biggest regulatory revamp in decades.
As part of the plans to change the oversight of the $60 trillion financial system, the China Banking and Insurance Regulatory Commission will be dismantled, while the China Securities Regulatory Commission (CSRC) will become a government agency reporting directly to the State Council.
The new national financial regulator will take over some functions from the People’s Bank of China (PBOC), including the oversight of financial holding companies and financial consumer protection. This way, the PBOC will be tasked with more macro-level or systemic risks managing and ensuring financial stability. This new system is similar to that in Australia.
Beijing tightening its grip over data
In addition to the new financial regulator, China will build a new national bureau to have a better grip on data resources.
Data security has become a major concern. Last year, the Chinese cyberspace regulator fined ride-hailing giant Didi Global $1.2 bn for violations of cybersecurity and data protection laws. And also with the US there are ongoing tech disputes. Most recently, US national security officals showed concerns over Chinese-owned video app TikTok’s data collection.
China’s new national data bureau will be responsible for “coordinating the integration, sharing, development and application of data resources, and pushing forward the planning and building of a Digital China, the digital economy and a digital society”.
Furthermore, the Ministry of Science and Technology will also get an overhaul. “In the face of international tech competition and a severe situation of external containment pressures, we must further organize our technological leadership and management system to better coordinate our strength to overcome challenges on strategic core technologies,” the People’s Republic plan stated.
The restructuring is said to help China “accelerate the achievement of high-level technological self-reliance”.
