China’s central bank has recently cut its required reserve ratio (RRR) to help save the dying real estate market, but the policy was reversed sharply.
The Wall Street Journal reported that the Communist Party of China (CCP) leader Xi Jinping has recently conducted a comprehensive inspection of financial and banking regulators to clarify financial transactions between these organizations and large private companies such as Jack Ma, Ant Group, Evergrande Group and more. The central bank of China is also on the list of inspections.
The CCP’s Discipline Inspection Committee was tasked with carrying out this comprehensive inspection.
Central bank leaders in downtown Beijing revealed that inspectors strictly controlled the documents and asked difficult investigative questions. They said they would not tolerate any violations of the bank, and that the central bank, like other agencies, must follow all the CCP’s leadership and administration.
The CCP commented that the central bank has ineffectively managed the financial activities of industries like entertainment, education, and technology. At the same time, the CCP is asking the central bank to relieve debt pressure on the real estate industry. As a result, early this fall, the CCP began to inspect the central bank.
In an insider’s opinion, the Central Commission for Discipline Inspection conducted a comprehensive inspection due to the CCP’s suspicion of China’s central banking system. They argue that the central bank has connected with private companies to manipulate finance.
The central bank may be negligent in managing the risks brought by private companies. However the inspection’s results turn out, the financial giants such as Jack Ma’s Ant Group; real estate developer China Evergrande Group, are currently on the verge of collapse.