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Prevent and Control Financial Risks: China and the World


By Li Wei, DRC


Preventing and controlling financial risks remain a common issue for the world. While the global economy witnessed a recovery across the board in 2017, the financial risks are still lingering on and cannot be neglected. As the impact of the financial crisis becomes gradually weakened and the global economy gains momentum for a rebound, the statistics released by the World Economy Forum show that the importance of financial risks in global risks perception began to decline. Be that as it may, we cannot ignore the potential financial and other risks behind the recovery boom.

The fragile factors relating to global recovery are as follows. First, the economic and social structure undergoes a slow adjustment and the mid-to-long-term growth drivers are still insufficient. Second, macro-leverage rate has climbed notably and the financial fragility has increased. Third, asset valuations are held at a high level with the potential danger of rapid falling. Fourth, the rise of trade and investment protectionism has cast a shadow over the prospects of world economic recovery and the stability of global financial markets.

Measures to avert risks are raised as follows. China has always attached great importance to preventing and controlling financial risks and is committed to making its own contribution to global financial stability. In recent years, the Chinese government has taken various measures to strengthen the prevention and control of financial risks, focusing on improving the policy system, enhancing organizational security and strengthening law enforcement. First, China has improved the policy system to prevent and mitigate financial risks. Second, China has promoted the organizational guarantee to avoid and resolve financial risks. Third, China has raised the risk awareness and strengthened the law enforcement of financial supervision. Fourth, China has achieved positive results in preventing financial risks by taking comprehensive measures.

We need to embrace the spirit of solidarity and strengthen cooperation in difficult times. Today, with the deepening development of economic globalization, the trend of financial risks spreading across the border has become increasingly prominent. No country can stand alone in the face of risks. Currently, work could be done from the following three aspects. First, various countries need to strengthen their capacity of preventing and controlling financial risks. Second, global macro-economic policy coordination should be strengthened. Third, global financial stability mechanism should be consolidated so as to press ahead the improvement of international financial governance system.