Former Vice Chairman of the China Banking and Insurance Regulatory Commission, Wang Zhaoxing: Has been deeply involved in financial regulation for nearly 30 years and participated in WTO negotiations.

How does financial regulatory reform reflect its service concept for the real economy?

Interface News Reporter | An Zhen

Interface News has learned that former Vice Chairman of the China Banking and Insurance Regulatory Commission (CBIRC) and State Council Advisor Wang Zhaoxing passed away recently due to illness at the age of 67. Wang Zhaoxing was a veteran who devoted nearly thirty years to financial regulation, witnessing and participating in the process of China’s financial reform and opening up, as well as the continuous improvement of regulatory mechanisms.

Born in 1959 in Yushu, Jilin, Wang Zhaoxing entered the finance and economics department of Jilin University of Finance and Economics (now Jilin University of Finance) in 1978; he then pursued a master’s degree in monetary banking at Xi’an Jiaotong University. After graduating with a master’s degree in 1985, he stayed on to teach at the university and later obtained a Ph.D. in economics from Xi’an Jiaotong University.

In 1990, Wang Zhaoxing entered the People’s Bank of China, serving as an officer in the Securities Division of the Financial Management Department, thus beginning nearly thirty years of career in financial regulation. From 1991 to 1999, he progressed from an ordinary officer in the Securities Division of the Financial Management Department to a deputy-level researcher in the Policy Research Office, and then to the Director of the Banking Supervision Division, accumulating rich regulatory experience.

In March 1999, Wang Zhaoxing was promoted to Deputy Director of the Banking Supervision Department of the People’s Bank of China. In 2002, he became the head of the Banking Supervision Group at the People’s Bank of China (equivalent to a bureau chief).

During this period, Wang Zhaoxing represented the banking sector in the negotiations for China’s accession to the World Trade Organization (WTO), led major research projects including the assessment of the “Core Principles for Effective Banking Supervision” in China, the planning for the implementation of new international regulatory standards in the Chinese banking sector, the opening up of the banking sector, improving financial services for small enterprises, the construction of a non-site supervision system for banks, and risk warning initiatives.

Wang Zhaoxing witnessed and participated in the reform and development of China’s financial regulatory system in recent years. In 2003, the former China Banking Regulatory Commission (CBRC) was established, and Wang Zhaoxing was transferred to serve as the Director of the Banking Supervision Division III of the former CBRC. In 2007, he successively served as Assistant to the Chairman and Vice Chairman of the former CBRC, overseeing important areas such as prudential regulation, large bank supervision, and policy research, and also served concurrently as the Director of the former Beijing Banking Regulatory Bureau.

“Finance that is disconnected from the real economy is like water without a source or wood without roots.” In 2014, at a press conference held by the State Council Information Office, Wang Zhaoxing stated that the real economy itself is the foundation of finance; if the real economy falls into trouble, finance will struggle to thrive and develop independently. Therefore, finance must return to the essence of serving the real economy. Finance cannot engage in self-innovation, self-circulation, or self-expansion, otherwise, it will lead to financial bubbles and crises.

In 2017, in response to the chaos surrounding “shadow banking,” the former CBRC began to strengthen regulation and revise regulatory systems. In March 2018, according to the State Council’s institutional reform plan, the former CBRC and the former China Insurance Regulatory Commission were merged to form the former China Banking and Insurance Regulatory Commission (CBIRC). Wang Zhaoxing became the first-ranking Vice Chairman and a member of the party committee of the former CBIRC.

In February 2019, Wang Zhaoxing stated at a press conference held by the State Council Information Office that over the past two years, regulatory authorities had revised and formulated nearly a hundred regulatory systems, laws, and measures to address loopholes and gaps in regulation. Simultaneously, they conducted on-site inspections of over a hundred thousand banking and insurance institutions, penalized nearly 6,000 non-compliant banking and insurance institutions, held over 7,000 individuals accountable, and banned more than 300 individuals from entering the banking and insurance industries for a set period or even for life. They also revoked the qualifications of 454 individuals for serving as directors and senior executives at banking and insurance institutions for a set period or for life.

Wang Zhaoxing introduced that after two years of efforts, various financial irregularities have been effectively curbed, illegal operations and illegal financial activities have been effectively managed, shadow banking activities have been effectively regulated, financial risks have been generally controlled, financial safety and stability have been effectively maintained, and the state of financial risks has shifted from a dispersive to a convergent state, fundamentally curbing and transforming the situation of financial funds moving from the real to the virtual, enabling more financial resources to flow into the real economy. This also restrained the wild growth of shadow banking and the overheating of real estate finance, making them subject to regulatory control.

“This also broke some international predictions that the wild growth of shadow banking and the overheating of real estate finance in China might trigger systemic financial risks and crises,” Wang Zhaoxing said.

In July 2019, Wang Zhaoxing was appointed as a State Council advisor; in September of the same year, he stepped down from his position as Vice Chairman of the former CBIRC.

After stepping down, Wang Zhaoxing remained active at the forefront of the financial sector. In 2021, on the occasion of the 20th anniversary of China’s accession to the WTO, he accepted an exclusive interview with the Financial Times, systematically reviewing the process of China’s financial industry opening up since joining the WTO. He pointed out that the improvement of the financial regulatory system is a dynamic and continuous process, and in the future, it is necessary to further refine prudential regulatory standards and build a risk disposal and financial stability保障体系.