(Yicai Global) Jan. 26 -- China will continue to clamp down on the “disorderly expansion of capital,” which largely refers to the unbridled growth of big internet-based firms, and will set “traffic lights” for guidance, the country’s financial regulator said at its 2022 work conference held yesterday.

The China Banking and Insurance Regulatory Commission will strengthen its oversight of monopolistic and unfair competition practices in the financial sector and strongly crack down on any businesses operating without a license, it said.

It is necessary for China to strengthen regulation of large internet-based platforms to make sure they have the necessary business licenses and to ensure they are abiding by the rules, Dong Ximiao, chief researcher at Merchants Union Consumer Finance, told Yicai Global.

China will continue to prevent and defuse financial risks in line with its goal of having no systemic financial risks, and in particular will focus on handling the rebound in non-performing assets, the CBIRC said. Last year the CBIRC disposed of CNY3.1 trillion (USD490.32 billion) worth of non-performing assets in the banking sector.

The pressure regarding the disposal of bad debts in 2021 mainly resulted from the overall macroeconomic downturn, especially in the real estate sector, which was heavily involved, Zeng Gang, director of Shanghai Institution for Finance and Development, told Yicai Global.

These risks can be resolved with the gradual strengthening of policies that stabilize growth and the steady recovery of the economy, Zeng added.

The real estate sector will remain one of this year's main priorities, said the CBIRC. It will continue to improve long-term mechanisms to “stabilize land prices, housing prices and expectations” and support the healthy development of the property market by implementing varied policies according to different cities.

There may still be some potential risks in the real estate sector, but these risks can be controlled through the implementation of policy-related regulation and the formation of long-term mechanisms in the housing market, Zeng said, adding that the property market is deeply connected to the financial sector, and is a key driver of the economy.

This year, more efforts should be made to support the moderate and timely investment in infrastructure, to spur the merger and restructuring of small and medium-sized financial institutions as well as to facilitate the acceleration of the disposal of non-performing assets, the CBIRC added. It will also help small- and medium-sized banks and insurance firms to supplement their capital through a number of channels.

Editors: Xu Wei, Kim Taylor