China boasts the largest new capital inputs among all economies in the world, but it is a challenging task to raise the efficiency of fund utilization. The key is to avoid the diversion of investment out of the real economy and to continuously clean up funds which circulate solely within the financial sector.
For more than two years, we have remained committed to rectification of market irregularities and dismantled shadow banks, achieving a net reduction of RMB13.74 trillion of high-risk assets, consequently shortening the financing chain and lowering financing costs. Currently, there are signs of relaxed regulation in the world that promote resurgence of shadow banks, which requires us to be ever vigilant.