China’s Finance System Needs to Be Healthy to Serve the Real Economy

It is a misconception to believe that strict control over the financial sector is necessary to transition from focusing on the speculative ‘virtual’ economy to the tangible ‘real’ economy

To seek high-quality financial development, it’s crucial to carefully manage the relationship between the “real” and the “virtual” economies in China. Photo: VCG

A new opportunity is emerging in the development of China’s financial industry. Recently, Premier Li Qiang presided over a Central Financial Committee meeting to deliberate on a plan that will divvy up key tasks for advancing high-quality financial development, a critical aspect of implementing the Central Financial Work Conference’s decisions. The meeting underscored the need to enhance the quality of financial services in supporting economic and social development, to foster the growth of the financial industry, and to comprehensively strengthen financial regulation to effectively manage and mitigate risks. Clearly, achieving these goals requires a precise understanding of the longstanding central financial policy of shifting from “virtual” to “real” and a dialectical view of the “real” versus the “virtual.”