China has issued a comprehensive China financial sector plan covering the period from 2026 to 2030, setting out a roadmap for building a modern financial system with Chinese characteristics. The plan was formulated by the office of the Central Financial Commission in coordination with relevant financial authorities, as confirmed by Lu Lei, deputy governor of the People’s Bank of China, at a press conference on Thursday.
By 2030, the plan aims to establish the overall framework of a modern financial system, ensure well-coordinated and effective financial regulation, optimise the structure of the financial system, enforce rigorous financial supervision, and make financial risk prevention and control both targeted and efficient. Additional objectives include improving the quality and effectiveness of financial support for economic and social development, building a comprehensive legal framework for the sector, steadily expanding high-standard financial opening, and increasing the sector’s international influence and competitiveness.
Looking further ahead, the China financial sector plan sets a longer-term ambition for 2035, when China aims to have largely established a highly adaptive, competitive and inclusive modern financial system, laying a solid foundation for strengthening the country’s position in global finance.
Financial Sector Reform, Supervision and Monetary Policy Under the China Financial Sector Plan
Key tasks outlined in the plan include improving the financial macro-regulation system, strengthening financial supervision, effectively preventing and defusing financial risks, serving the real economy more proactively, promoting high-quality development across the sector, and expanding high-standard financial opening.
On monetary policy, Lu Lei said the central bank will continue to transform and improve its monetary policy framework to better adapt to profound changes in the country’s economic and financial structures. The PBOC remains firmly committed to maintaining currency value stability and supporting high-quality development of the real economy. Planned improvements include enhancements to the base money supply mechanism, the reserve requirement system and open market operations, which will be conducted with greater flexibility and precision.
China will maintain its managed floating exchange rate system and allow the market to play a decisive role in exchange rate formation. The central bank also plans to strengthen monetary policy communication and expectations management, developing more credible, regular and institutionalised communication mechanisms.
During the preceding 14th Five-Year Plan period from 2021 to 2025, the banking and insurance sectors provided more than 170 trillion yuan in additional financing support to the real economy through loans, bonds and equity, providing context for the ambitions set out in the new plan.
Capital Market Reform, Banking Sector Development and Financial Opening
Li Chao, vice chairman of the China Securities Regulatory Commission, said at the press conference that China will accelerate a new round of capital market reform and opening up. The goal is to achieve marked improvements in the market’s overall strength and international competitiveness by 2030. The securities regulator plans to introduce more inclusive rules for stock issuance, listings and mergers and acquisitions, working to make the A-share market the preferred listing venue for high-quality domestic companies. Since the beginning of the year, medium- and long-term funds including social security, annuity and insurance funds have purchased more than 600 billion yuan worth of A-shares on a net basis.
In banking and insurance, Cong Lin, deputy head of the National Financial Regulatory Administration, said China will take forceful, orderly and effective steps to prevent and defuse risks at local small and medium-sized financial institutions. Financial institutions will be guided to shift from scale-driven, high-speed expansion toward a model focused on quality and performance. Differentiated measures will clarify the permitted scope of business and prohibited conduct for different types of institutions, guiding them to focus on core businesses and pursue differentiated development. These steps aim to enhance the adaptability and competitiveness of the financial system as part of the broader financial sector reform agenda.
On financial opening, Li Bin, deputy head and spokesperson of the State Administration of Foreign Exchange, confirmed that China has achieved basic convertibility for direct investment transactions. Cross-border securities investment arrangements now include institutional investor programmes, market connectivity mechanisms and direct access to domestic markets for overseas investors, while all forms of cross-border financing are subject to macro-prudential management.
The China financial sector plan, embedded within the country’s 15th Five-Year Plan for 2026 to 2030, calls for aligning the growth of social financing and money supply with targets for economic growth and overall price levels, expanding patient capital, and strengthening both financial supervision and financial risk prevention across the system.
