Xi Jinping: Follow the Path of Financial Development with Chinese Characteristics and Build a Financial Power

Since the 18th National Congress of the Communist Party of China, we have actively explored the laws governing financial development in the new era, continuously deepened our understanding of the essential nature of socialism with Chinese characteristics in finance, and steadily advanced innovation in financial practice, theory, and institutions. Through these efforts, we have accumulated valuable experience and gradually forged a path of financial development with Chinese characteristics.

First, we must uphold the Party Central Committee’s centralized and unified leadership over financial work. The Party’s leadership is the most essential feature of China’s distinctive path of financial development and represents our country’s greatest political and institutional advantage in this field. All major achievements in China’s financial development have been attained under the Party’s leadership. Conversely, many of the problems that have emerged in the financial system stem from the fact that numerous institutions in the financial sector have failed to effectively implement the decisions and arrangements of the Party Central Committee, have weakened or diluted the implementation of Party leadership, have neglected Party political development, and have not rigorously advanced efforts to foster a clean and honest Party conduct. Therefore, it is imperative to uphold the Party Central Committee’s centralized and unified leadership over financial work, to give full play to the Party’s core leadership role in overall planning and coordinating all parties, and to ensure that financial work always advances in the correct direction.
Second, we must steadfastly uphold a people-centered value orientation. The financial undertakings under the leadership of our Party are ultimately aimed at benefiting the people, which stands in stark contrast to the fundamental nature of finance in some countries—where it serves capital and a small wealthy elite. On this new journey in the new era, financial work must firmly stand on the people’s position, enhance the diversity, inclusiveness, and accessibility of financial services, and better protect the rights and interests of financial consumers.
Third, we must steadfastly uphold the fundamental principle of using financial services to support the real economy. The real economy is the foundation of finance, and finance is the lifeblood of the real economy; serving the real economy is finance’s inherent duty. If finance becomes obsessed with self-circulation and self-expansion, it will lose its source and footing, ultimately giving rise to a crisis. China’s financial sector must stay true to its mission of serving the real economy and promoting high-quality development; it must never decouple from the real economy and drift toward the virtual.
Fourth, we must steadfastly regard risk prevention and control as the enduring priority of financial work. Finance both serves to manage and diversify risks and inherently carries risk itself. Today, China’s financial sector is far larger and more complex than in the past, with significantly heightened systemic interconnectedness of risks. We must strengthen our sense of potential danger, rigorously implement risk prevention and control measures, and enhance the resilience of the financial system.
Fifth, we must steadfastly advance financial innovation and development along the tracks of marketization and rule of law. Financial stability hinges on sound institutions, vitality derives from the market, and order is maintained through the rule of law. Financial transactions involve complex and diverse rights-and-obligations relationships, are characterized by information asymmetry, and place extremely high demands on creditworthiness; therefore, a robust regulatory framework is essential. We must establish a comprehensive system of financial laws and market rules that unequivocally prohibit unlawful conduct and rigorously hold violators accountable, thereby ensuring the healthy functioning of the financial market.
Sixth, we must steadfastly deepen supply-side structural reform in the financial sector. A key feature and strength of China’s financial system is the dominant role of state-owned financial institutions; however, challenges remain, including an over-reliance on indirect and debt financing, insufficient inclusiveness of financial services, as well as the proliferation of financial activities that are overly generalized, poorly regulated, and largely illegal. To address these issues, we need to deepen supply-side structural reform in finance, clarify the relationship between indirect and direct financing and between equity and debt financing, optimize the structure of the financial system, improve financial infrastructure, and enhance the quality and efficiency of financial services.
Seventh, we must uphold the coordinated approach of financial opening-up and financial security. Financial opening-up must safeguard national financial and economic security, by both guarding against risks inherent in the opening-up process itself and countering risks deliberately engineered by adversarial actors. It is essential to strike the right balance in the pace and intensity of opening-up, substantially enhance financial regulatory capacity, and, through higher-level risk prevention and control, underpin a higher level of financial openness.
Eighth, we must adhere to the general principle of seeking progress while maintaining stability. In financial work, we should uphold the balance between stability and progress, use progress to promote stability, and establish new frameworks before dismantling old ones. Stability must be given top priority: macroeconomic regulation, financial development, financial reform, financial supervision, and risk resolution must all be conducted in a stable manner. Monetary policy adjustments—whether tightening or easing—should not be implemented too abruptly, so as to avoid sharp fluctuations. At the same time, we must be proactive and seize every opportunity to put in place the necessary institutional arrangements, continuously addressing problems and making steady progress while consolidating our footing and maintaining the fundamental momentum. We must also ensure the prudence of monetary policy, make flexible use of a variety of policy tools, and promote the steady and healthy development of the macroeconomy.
The foregoing points clarify how financial work should be viewed and carried out in the new era and on the new journey, forming an organic whole that embodies the fundamental stance, perspectives, and methods of the Chinese path to financial development. This path not only adheres to the objective laws governing modern financial development but also features distinct characteristics that are well-suited to China’s national conditions, setting it apart in essence from Western financial models. We must remain firmly confident, continue to explore and refine this approach through practice, and ensure that this path grows ever broader and more promising.
Two
At the Central Financial Work Conference, I put forward the goal of accelerating the building of a financially strong nation. What does it mean to be a financially strong nation? It means having a robust economic foundation, with world-leading economic strength, technological prowess, and overall national power, coupled with a comprehensive set of critical, core financial elements. First, it requires a powerful currency that is widely used in international trade, investment, and foreign-exchange markets and enjoys the status of a global reserve currency. Second, it calls for a strong central bank capable of effectively conducting monetary-policy management and macroprudential oversight, as well as promptly and efficiently preventing and resolving systemic risks. Third, it demands robust financial institutions that operate with high efficiency, possess strong risk-resilience, offer a full range of financial services, have global presence, and are internationally competitive. Fourth, it necessitates a powerful international financial center that can attract global investors and influence the international pricing system. Fifth, it requires robust financial regulation, a sound financial legal framework, and significant voice and influence in the formulation of international financial rules. Sixth, it calls for a strong pool of financial talent. Although China is already a major financial player—ranking first in the world in indicators such as bank size and foreign-exchange reserves, second in the world in the size of its bond and stock markets, and among the top globally in insurance scale—overall it remains large but not strong. Building a financially strong nation will require sustained, long-term efforts and unwavering commitment.
To build a financially strong nation, we must accelerate the development of a modern financial system with Chinese characteristics.
First, a scientific and prudent financial regulatory system. We must establish a modern central banking system, improve the framework for China’s distinctive modern monetary policy, refine the mechanisms for base-money injection and money-supply regulation, fully leverage both the aggregate and structural functions of monetary and credit policy tools, and effectively safeguard the value of the RMB as well as economic and financial stability.
Second, a well-structured financial market system. We must accelerate the development of a capital market that is safe, standardized, transparent, open, dynamic, and resilient. This entails developing a multi-tiered equity market, enhancing the quality of listed companies, and further institutionalizing and normalizing the delisting mechanism. We should also fully leverage the role of venture capital and private equity in supporting technological innovation, while strengthening the functions of the bond market, money market, and foreign-exchange market.
Third, we need a financial institutional system characterized by division of labor and collaboration. China’s financial institutions cover all major categories; the key is to pursue differentiated development and complementary strengths, with each institution fulfilling its specific role and leveraging its unique advantages in serving the real economy. All types of financial institutions must stay true to their original mission and return to their core functions, effectively enhancing their competitiveness and service capabilities to meet the multi-tiered and diversified financial service needs of the real economy and the general public.
Fourth, establish a comprehensive and effective financial regulatory system. Strengthen financial regulation across the board by reinforcing institutional oversight, conduct-based supervision, functional regulation,穿透式监管 (penetrative supervision), and ongoing monitoring, so as to achieve full regulatory coverage. This will effectively enhance the forward-looking nature, precision, coordination, and effectiveness of regulation, thereby building a financial safety net.
Fifth, we will develop a diversified and specialized system of financial products and services. We will strengthen high-quality financial services for major national strategies, key sectors, and areas of weakness, and make solid progress in the five priority areas of technology finance, green finance, inclusive finance, elderly-care finance, and digital finance, while accelerating the digital and intelligent transformation of the financial sector.
Sixth, an independent, controllable, secure, and efficient financial infrastructure system. Strengthen overall planning, refine market access, regulatory standards, and operational requirements, and enhance the level of self-reliance in critical financial infrastructure as well as the security and reliability of its software and hardware.
Three
To promote high-quality financial development and build a financially strong nation, we must uphold the integrated approach of rule by law and moral governance, vigorously carry forward China’s fine traditional culture, and actively cultivate a financial culture with Chinese characteristics.
First, we must be honest and trustworthy and never cross the red line. China’s fine traditional culture places great emphasis on keeping one’s word and honoring commitments. As the financial industry is built on trust, it is all the more important to uphold the spirit of contract, abide by market rules, and maintain professional ethics. We should carry forward the tradition of “iron abacus, iron ledgers, and iron regulations,” and never engage in falsification of accounts. We must always repay debts, cherish our reputation, and refrain from becoming a deadbeat debtor. Furthermore, we need to strengthen self-regulation within the industry and impose lifetime bans on those who commit serious breaches of trust.
Second, we must pursue profit in accordance with moral principles and not be driven solely by the pursuit of gain. Traditional Chinese culture emphasizes that “those who put righteousness before profit are honored; those who put profit before righteousness are disgraced,” and to forsake righteousness for personal gain has always been scorned by gentlemen. Finance possesses both functional and profit-oriented attributes, yet profitability must subordinate to the effective fulfillment of its core functions. The financial sector must earnestly fulfill its social responsibilities and strive for the symbiotic co-prosperity of finance with the economy, society, and the environment.
Third, we must adopt a prudent and steady approach, eschewing the pursuit of quick gains at the expense of long-term sustainability. China’s fine traditional culture underscores the principle that “haste makes waste, and chasing small profits will prevent one from accomplishing great undertakings.” Internationally, many financial institutions have achieved enduring success and remained viable for centuries—key to their longevity is precisely this commitment to prudence and caution. The financial sector must cultivate a sound understanding of business management, performance evaluation, and risk management; operate in a steady and prudent manner; focus on both the present and the long term; refrain from seeking short-term windfall profits; avoid impetuous expansion and reckless overreach; and never take risks beyond its capacity to absorb.
Fourth, we must uphold fundamental principles while fostering innovation, and avoid drifting from the real economy toward the virtual. The key is to address the questions of whom finance serves and why we should innovate, ensuring that innovation is squarely focused on better serving the real economy and making life more convenient for the people. We must reject pseudo-innovation and uncontrolled, disorderly innovation.
Fifth, we must operate in strict compliance with the law and refrain from any unlawful or arbitrary conduct. Financial operations place particular emphasis on legal and regulatory compliance. Financial institutions and their personnel must rigorously observe laws and regulations, adhere to financial regulatory requirements, and conduct business within the scope of their regulatory licenses and in accordance with the law. They must not seek profits by exploiting loopholes in laws and regulations or circumventing oversight, nor may they cross red lines or undermine fundamental regulatory standards by operating outside the legal framework.