I. Executive Summary: The Narrative of a Mature Financial Superpower (TL;DR)

The State Council Information Office press conference held on September 22, 2025, was not merely a review of the Chinese financial industry’s achievements during the “14th Five-Year Plan” (2021-2025) period; it was a meticulously crafted strategic declaration. Its core narrative proclaimed that China’s financial system has transitioned from a phase of high-speed, sometimes unrestrained, expansion to a new stage characterized by state-led control, emphasis on governance, and maturity. The central message was no longer just about immense scale, but about enhanced systemic stability, deep alignment with national strategic priorities, and the comprehensive consolidation of regulatory power.

The data presented showcased the unprecedented scale of China’s financial system: as of the end of June 2025, the total assets of China’s banking industry approached 470 trillion yuan, ranking first in the world; the stock and bond markets were firmly the second largest globally; and foreign exchange reserves had ranked first for 20 consecutive years.¹ Concurrently, the financial system’s support for the real economy was unparalleled, with the banking and insurance sectors alone providing up to 170 trillion yuan in new funding over five years.⁵ More critically, the flow of these funds demonstrated clear strategic intent, with average annual loan growth rates for key areas like sci-tech SMEs, green industries, and inclusive finance all exceeding 20%.³

Looking ahead to the upcoming “15th Five-Year Plan” (2026-2030), the press conference sent three core signals:

1. A Shift from Growth to Governance: The policy focus will decisively move from quantitative expansion to quality improvement, risk prevention, and regulatory discipline.

2. Finance as a Tool of Statecraft: The financial system will be more explicitly wielded as a core instrument of industrial policy to achieve national goals in technology, green energy, and social stability.

3. Investor Protection as a Political Imperative: Rebuilding domestic investor confidence through strict regulation and the creation of tangible investment returns has become a high-level priority for maintaining social and political stability.

A particularly telling detail was the explicit statement by Pan Gongsheng, Governor of the People’s Bank of China, in his opening remarks that the press conference was for a retrospective summary and did not involve short-term policy adjustments.⁷ This statement proactively managed market expectations, signaling a shift from a reactive regulator often responding to market volatility to a confident, long-term-oriented manager actively shaping the narrative. This marks a change in posture from “passive firefighting” to “proactive management,” setting an authoritative and confident tone for the next five years of financial development.

II. The Regulators’ Report Card: A Deep Dive into “14th Five-Year Plan” Financial Achievements

The press conference brought together the heads of China’s top financial regulatory bodies, whose individual reports collectively painted a picture of a financial system that has comprehensively advanced in scale, resilience, and regulatory capacity.

A. The Central Bank’s Mandate (People’s Bank of China - Pan Gongsheng): Macro-Stability and Strategic Guidance

The PBOC’s report began by reaffirming the “triple crown” status of China’s financial system: the world’s largest banking assets, second-largest capital markets, and number one foreign exchange reserves for 20 consecutive years.¹ This not only established the system’s global significance but also provided context for the uniqueness of its policy framework.

At the core of the report was the initial formation and continuous improvement of a “modern monetary policy framework with Chinese characteristics”.³ This official phrasing emphasizes the principle of “putting ourselves first” in policymaking, meaning China’s monetary policy prioritizes domestic economic conditions and national strategic goals over simply following Western central banking paradigms. Its toolkit includes not only traditional instruments like interest rate adjustments but also structural tools designed to guide credit flows.

Serving the real economy is the ultimate test of this framework’s effectiveness. The key data points in the report—average annual growth rates exceeding 20% for loans to sci-tech SMEs, inclusive micro and small enterprises, and green loans ⁵—powerfully demonstrate the effective implementation of the “Five Major Areas” policy directive (sci-tech finance, green finance, inclusive finance, pension finance, and digital finance) from the Central Financial Work Conference. At the same time, Pan Gongsheng stressed that China’s financial system is “overall stable” ³, a crucial reassurance to market confidence amidst a complex domestic and international environment, with the orderly resolution of several prominent risk points cited as strong evidence of systemic stability.

B. Guardian of Banking and Insurance (National Financial Regulatory Administration - Li Yunze): System Fortification and Disciplinary Reinforcement

The report from the National Financial Regulatory Administration (NFRA) showcased the solidity of the “ballast” of China’s financial system. The total assets of the banking and insurance industries have surpassed 500 trillion yuan, growing at an average annual rate of nearly 9% over the past five years ⁷, further cementing China’s position as the world’s largest credit market and second-largest insurance market.

In terms of funding the national economy, the NFRA quantified its contribution with a concrete figure: 170 trillion yuan in new funding provided through credit, bonds, and equity.⁵ Among this, targeted lending to key sectors such as scientific research and technology loans (average annual growth of 27.2%) and medium- and long-term manufacturing loans (average annual growth of 21.7%) highlighted the deep synergy between finance and national industrial policy.⁶

Behind this rapid growth was a large-scale, systematic risk-clearing operation. Li Yunze revealed that the scale of non-performing asset (NPA) disposal during the “14th Five-Year Plan” period increased by over 40% compared to the “13th Five-Year Plan” period.⁷ This figure reveals a deliberate strategy: to proactively conduct a massive asset cleanup to fortify bank balance sheets before potential economic headwinds materialize. This forward-looking de-risking, combined with over 50 trillion yuan in total risk-provision capital and reserves across the industry ⁷, has constructed a “fortress balance sheet” for the entire banking system.

Simultaneously, the “teeth” of regulation have become sharper. The NFRA has cumulatively penalized 20,000 institutions and 36,000 individuals.⁷ This data clearly indicates that the era of regulatory forbearance is over. With regulatory power concentrated in the NFRA, the intensity and consistency of enforcement actions have significantly increased.

C. Architect of Capital Markets (China Securities Regulatory Commission - Wu Qing): Rebuilding for Quality and Trust

The speech by CSRC Chairman Wu Qing centered on the “comprehensive reconstruction” of the capital market’s fundamental systems and regulatory logic under the guidance of the new “Nine Articles”.⁷ This represents the most profound reform in recent years, marking a shift in the market’s function from primarily serving corporate financing needs to a dual objective of balancing financing with investor returns.

“Strict supervision and stringent management” has become the CSRC’s new working principle. Wu Qing emphasized that regulatory enforcement is focused on issues deeply detested by investors, such as financial fraud. The aim is not only to “pursue the main culprits” but also to “punish the accomplices,” systematically dismantling the “ecosystem” behind fraudulent activities.¹³

The strict implementation of the delisting system was presented as a key achievement. A total of 207 companies were smoothly delisted during the “14th Five-Year Plan” period ¹⁴, a huge leap compared to the past. This sends a strong signal that the market will no longer tolerate “shell companies” and “bad apples,” and that improving the overall quality of listed companies has become a core mission. Despite the tightening of regulation, the capital market still achieved significant progress in terms of scale (A-share market capitalization surpassed 100 trillion yuan ¹⁶) and openness (13 new foreign-controlled institutions were approved, with foreign holdings reaching 3.4 trillion yuan in market value ¹⁵).

D. Gatekeeper of Foreign Exchange (State Administration of Foreign Exchange - Zhu Hexin): The Cornerstone of Stability

The core message from the State Administration of Foreign Exchange (SAFE) was stability. This stability is anchored by foreign exchange reserves that have remained above $3 trillion for 20 consecutive years ¹, which serves as China’s most important buffer against external shocks and for maintaining the stability of the RMB exchange rate.

In terms of opening up, SAFE has adopted a strategy of “managed opening.” On one hand, it has promoted international exchange by expanding visa-free arrangements ¹⁷ and facilitating foreign investment. On the other hand, it ensures that the opening process does not jeopardize national financial security. The establishment of a “safe and efficient” cross-border RMB payment and clearing network ³ is a key step in the long-term strategic layout to support the internationalization of the RMB and reduce reliance on the US dollar system.

Table 1: “14th Five-Year Plan” Financial Industry Core Metrics Scorecard (2021-2025)

Category	Metric	Data	Source
Overall Scale & Stability	Total Banking Assets	Nearly 470 Trillion Yuan	¹
	Total Banking & Insurance Assets	Over 500 Trillion Yuan	⁷
	A-Share Market Capitalization	Over 100 Trillion Yuan	¹⁶
	Foreign Exchange Reserve Scale	Over $3 Trillion for 20 consecutive years	¹
Serving the Real Economy	New Funding Provided by Banking & Insurance	170 Trillion Yuan	⁵
	Avg. Annual Growth in Loans to Sci-Tech SMEs	Over 20%	⁵
	Avg. Annual Growth in Green Loans	Over 20%	⁷
	Avg. Annual Growth in Inclusive SME Loans	Over 20%	⁷
Capital Market Reform	Number of Delisted Companies	207	¹⁴
	Newly Approved Foreign-Controlled Financial Institutions	13	¹⁵
	Foreign Holdings of A-Shares (Market Value)	3.4 Trillion Yuan	¹⁵
Risk Management	Increase in NPL Disposal vs. 13th FYP	Over 40%	⁷
	Total Risk Provision Capital & Reserves (Banking & Insurance)	Over 50 Trillion Yuan	⁷
	Number of Penalized Institutions	Approx. 20,000	⁷

III. A Coordinated Strategy: Integrating Finance into the National Blueprint

The financial achievements revealed at the press conference do not exist in isolation but are the product of a coordinated national strategy. The formulation and execution of financial policy are deeply embedded within the broader national agendas of technology, environmental protection, fiscal policy, and the rule of law.

A. Fueling the Innovation Engine: The Fusion of Technology and Finance

There is a direct logical link between the financial data and the national technology strategy. The over 20% average annual growth in technology loans reported by the PBOC and NFRA ⁵ is the concrete financial execution of the national strategy to develop “new quality productive forces”.¹⁹ This funding is the critical fuel that supported the Ministry of Science and Technology’s report of China’s rise in the national comprehensive innovation capability ranking from 14th to 10th globally.¹⁹ The CSRC’s emphasis on increasing the “tech content” of the A-share market, with the tech sector’s market value now exceeding a quarter of the total market size ⁵, further confirms the capital market’s central role in supporting the strategy of technological self-reliance.

B. Financing the Green Transition: The Synergy of Ecology and Finance

The over 20% average annual growth in green loans ⁷ directly serves the national ecological agenda and the “dual carbon” goals set by the Ministry of Ecology and Environment. The financial system is being used as a powerful policy lever to incentivize corporations to undertake decarbonization and environmental protection. The work of the Ministry of Ecology and Environment in establishing new emissions standards ²¹ and building a product carbon footprint management system ²¹ creates clear demand and a regulatory framework for green finance. Finance makes these environmental policies economically viable for businesses, thereby accelerating the pace of the green transition.

C. A Macroeconomic Duet: The Coordination of Monetary and Fiscal Policy

To understand macroeconomic management during the “14th Five-Year Plan,” one must analyze the PBOC’s “supportive monetary policy” ³ in conjunction with the Ministry of Finance’s proactive fiscal policy. The Ministry of Finance detailed its large-scale fiscal support measures in its own press conference, including over 10 trillion yuan in new tax and fee reductions and 19.4 trillion yuan in new local government special-purpose bonds.²²

Macroeconomic management during this period demonstrated a clear division of labor. Facing multiple challenges including the aftermath of the COVID-19 pandemic, adjustments in the real estate market, and global economic uncertainty, fiscal policy took on the primary role of direct stimulus and investment, stabilizing the economic fundamentals through infrastructure construction and reducing burdens on enterprises. Meanwhile, monetary policy played a crucial supporting role by maintaining ample liquidity and stable financing costs to complement fiscal efforts, but it avoided the large-scale quantitative easing widely adopted in Western countries. This coordinated strategy allowed China to support its economy while successfully avoiding the trap of high inflation, showcasing mature macroeconomic governance capabilities.

D. The Bedrock of Rule of Law and a Unified Market

The strict enforcement by financial regulators is not an isolated action but a manifestation of the top-down modernization of national governance in the financial sector. The CSRC’s crackdown on financial fraud and the NFRA’s robust supervision are complementary to the efforts of the Ministry of Justice and the Central Political and Legal Affairs Commission to build a “socialist rule of law system”.²⁴ A stable and credible financial market must be built on sound property rights protection and a just judicial system. At the same time, the National Development and Reform Commission’s commitment to breaking down local protectionism and building a “unified national market” ²⁵ also creates the foundation for the efficient allocation of financial resources. Therefore, the strengthening of financial regulation and the deepening of the national rule of law are two sides of the same coin, jointly signaling to domestic and foreign investors that China is committed to building a more standardized, transparent, and predictable business environment.

Table 2: Mapping Financial Policy to National Strategic Goals

National Strategic Goal	Relevant Ministries (Context)	Key Financial Initiatives (Sept 22 Press Conference)	Data/Source Support
Developing New Quality Productive Forces	NDRC, Ministry of Science and Technology ¹⁹	Tech Finance	Avg. annual growth of loans to sci-tech SMEs >20%; A-share tech sector market cap >1/4 ⁵
Achieving ‘Dual Carbon’ Goals	Ministry of Ecology and Environment, NDRC ²¹	Green Finance	Avg. annual growth of green loans >20% ⁷
Promoting Common Prosperity/Social Stability	NDRC, Ministry of Finance ²²	Inclusive Finance	Avg. annual growth of inclusive SME loans >20% ⁷
Strengthening Rule of Law/Unified Market	Ministry of Justice, Central Political and Legal Affairs Commission ²⁴	Strict Supervision	207 companies delisted; Crackdown on fraud “ecosystem” ¹³
Enhancing Digital Sovereignty	National Data Administration ²⁸	Digital Finance	Leading mobile payments; Cross-border RMB payment network ³

IV. Strategic Outlook and Implications: Decoding the Policy Playbook for 2026-2030

This press conference was not just a summary of the past but a forecast for the future. The signals it sent provide a clear roadmap for understanding the direction of China’s financial development during the “15th Five-Year Plan” period.

A. The New Paradigm: Quality, De-risking, and Discipline

The strongest signal is that the keywords for China’s financial industry in the next five years will be quality, security, and discipline, rather than sheer scale. The old “moral hazard” model, which encouraged risk-taking based on implicit state guarantees, is being systematically dismantled. This means regulation will continue to tighten, compliance costs for financial institutions will rise, and tolerance for operational failure will decrease. The ultimate policy goal is to build a highly resilient financial system capable of withstanding both internal and external shocks, even if it means a moderate slowdown in credit growth. The establishment of new bodies like the Central Financial Commission and the National Financial Regulatory Administration will ensure this top-down discipline is strictly enforced.

B. The Future of Capital Markets: A Financing Platform for National Strategy

China’s capital markets will further evolve from a model dominated by retail speculation to one led by institutional “long-term capital” from sources like pension funds and insurance companies.²⁹ Its core function will be more clearly defined as efficiently channeling capital to nationally prioritized strategic industries (such as advanced manufacturing, biotechnology, and artificial intelligence) and providing stable, long-term returns for the growing middle class, thereby serving the broader goal of social stability. This implies that companies aligned with national strategic directions will find it easier to list and raise capital, while those in non-priority sectors or with poor corporate governance will face a tougher financing environment and even a higher risk of delisting.

C. Implications for Global Stakeholders

• For Investors: Opportunities lie in sectors highly aligned with the “Five Major Areas” and “new quality productive forces.” However, the nature of risk has shifted from macroeconomic uncertainty to regulatory and policy uncertainty. Understanding Beijing’s political priorities has become as important as analyzing financial statements. The crackdown on the fraud “ecosystem” ¹³ may create new business opportunities for reputable international audit and consulting firms.

• For Multinational Corporations: Access to and ease of financing in China will increasingly depend on a company’s contribution to national strategic goals. Companies in critical supply chains, green technology, or digital innovation will have a significant advantage. The efforts to build a unified national market ²⁵ and strengthen intellectual property protection ²⁴ may benefit foreign enterprises in China, but this benefit will always be balanced by the national will to pursue technological self-reliance.

• For Foreign Policymakers: China’s financial system is not evolving towards a market-led, Western-style model. Instead, it is consolidating into a powerful, state-directed system designed to achieve specific industrial and geopolitical objectives. Understanding this fundamental difference in logic is crucial for effective engagement with China on a range of issues, from global financial stability to trade and technology competition.

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