China's financial sector reports remarkable progress over 14th Five-Year Plan period

BEIJING - China's financial sector has achieved remarkable progress during the 14th Five-Year Plan period (2021-2025), with banking assets nearing 470 trillion yuan ($66.2 trillion) at the end of June this year to rank first globally.

It has maintained the world's largest foreign exchange reserves for a 20th consecutive year, and secured its second-place standing in both the stock and bond markets, central bank governor Pan Gongsheng told a press conference on the country's financial progress during the 14th Five-Year Plan period on Monday.

China leads globally in green finance, inclusive finance and digital finance, and it has established a multi-channel, widely accessible, secure and efficient cross-border RMB payment and settlement network in basic terms, while its mobile payments are at the forefront internationally, according to Pan.

The quality and efficiency of financial services supporting the real economy have improved significantly. Loans to China's small and medium-sized tech enterprises grew at an average annual rate of over 20 percent during the period, Pan said, adding that loans to small and micro businesses, as well as green development initiatives, also grew at an annual average of more than 20 percent during the period.

The financial sector has grown more robust, said Li Yunze, head of the National Financial Regulatory Administration, noting that the total assets of China's banking and insurance industries now exceed 500 trillion yuan, having expanded at an average annual rate of 9 percent over the past five years, reinforcing its position as the world's largest credit market and second-largest insurance market.

Trust, wealth management and insurance asset management institutions oversee funds totaling nearly 100 trillion yuan, which is double the scale recorded at the end of the 13th Five-Year Plan period (2016-2020), he said, adding that among the world's top 1,000 banks, 143 are Chinese, with six of the top 10 slots occupied by Chinese institutions.

Financial operations remain broadly stable. Key regulatory indicators such as non-performing loans, capital adequacy and solvency have improved steadily and remain within healthy ranges. Non-performing asset disposals have increased by over 40 percent compared to the 13th Five-Year Plan period. The industry's combined capital and provisions against risks total more than 50 trillion yuan, providing stronger resilience to challenges, Li said.

Financial services have reached a new level. Over the past five years, China's banking and insurance sectors have provided 170 trillion yuan in new funds to the real economy through various means, including loans, bonds and equity, Li said.

On the stock market, Wu Qing, chairman of the China Securities Regulatory Commission, told the press conference that technology companies are now a larger proportion of the A-share market as China steps up capital market support for sci-tech innovation.

Technology companies account for more than a quarter of the A-share market's capitalization, which is significantly higher than the combined market cap of the banking, non-banking financial and real estate sectors. And in recent years, more than 90 percent of newly listed companies have been tech companies or companies with a high level of technological expertise, he said.

Investment-side reforms have achieved significant breakthroughs, and medium and long-term funds held a combined market value of 21.4 trillion yuan in circulating A-share stocks at the end of August this year, representing a 32 percent increase from the end of 2020, Wu said.

On the foreign exchange market, Zhu Hexin, deputy governor of the central bank and head of the State Administration of Foreign Exchange, told the press conference that China's foreign exchange reserves have consistently remained above $3 trillion since the start of the 14th Five-Year Plan.

The balance of international payments remains fundamentally stable, and the current-account-surplus-to-GDP ratio is still within a reasonable range. Cross-border, two-way investment and financing remain active, with overseas institutions and individuals holding more than 10 trillion yuan in domestic stocks, bonds, deposits and loans as of the end of July, Zhu said, adding that cross-border receipts and payments totaled $14 trillion in 2024 - up 64 percent from 2020.