Two Sessions Interview | National People's Congress Deputy Zhang Qiaoliangil: Filling the Critical Gap in a Comprehensive Fundamental Law for China's Financial Sector

March 9th, the National People’s Congress Standing Committee Work Report shows that, around accelerating the development of a strong financial nation, this year will see the drafting of the Financial Law and Financial Stability Law, as well as amendments to the People’s Bank of China Law and the Banking Supervision Law.

“Drafting the Financial Law and Financial Stability Law is a key measure to implement the spirit of the Central Financial Work Conference and promote the modernization of the financial governance system and capacity. It is not only a practical need to address gaps in the financial legal system but also a long-term safeguard to maintain national financial security and promote high-quality development of the financial industry. These laws will lay a solid legal foundation for building a strong financial nation,” said Zhang Qiaoliang, a delegate to the National People’s Congress and chief partner at Shandong Kangqiao Law Firm, in an interview with the China Banking and Insurance Journal. For the financial industry, the introduction of these two laws will shift financial development from policy-driven to rule-of-law-led, clarify the boundaries of financial activities, regulate financial supervision responsibilities, prevent and resolve financial risks, guide finance back to serving the real economy, and promote fair, orderly, stable, and sustainable development of financial markets.

Filling the Legal Gap in Basic Laws

China Banking and Insurance Journal: What are the prominent shortcomings in China’s current legal system in the financial sector? How will the introduction of the Financial Law address practical issues?

Zhang Qiaoliang: Currently, China’s financial legal system still has some prominent shortcomings, mainly reflected in insufficient foundational institutional supply, inconsistent cross-sector and cross-market rules, unclear regulatory basis for emerging financial fields, and an underdeveloped risk prevention and resolution mechanism. These issues make it difficult to fully meet the needs of financial innovation and risk control.

The introduction of the Financial Law will specifically address these problems: First, establishing a top-level legal framework for financial rule of law to eliminate regulatory gaps and conflicts; second, unifying basic principles for financial activities to standardize the behavior of various financial entities; third, improving mechanisms for protecting financial consumers and investors to strengthen the credit foundation of financial markets; fourth, enhancing the financial regulatory system to improve authority and effectiveness; fifth, clarifying the boundaries of financial innovation to guide healthy progress within the rule of law, solving structural and mechanistic issues in financial development from a systemic perspective.

China Banking and Insurance Journal: Why is it necessary to formulate the Financial Law? How will it connect and coordinate with China’s current financial laws and regulations?

Zhang Qiaoliang: The core necessity of drafting the Financial Law is to fill the critical gap of the absence of a fundamental overarching law in China’s financial sector. For a long time, China has had a systematic set of single laws, but lacking top-level design has led to inconsistent regulatory standards and frequent conflicts in legal application. As a “basic law” for finance, the Financial Law will play a leading and coordinating role within the legal system, establishing a unified set of principles and norms for various financial activities.

The Financial Law will connect with existing laws such as the People’s Bank of China Law, Banking Supervision Law, Securities Law, and Insurance Law, forming an integrated, complementary hierarchy that creates a clear, logical, comprehensive, and efficient Chinese-style financial legal system, significantly improving the standardization, rule of law, and efficiency of financial governance.

Focused and Coordinated Efforts

China Banking and Insurance Journal: As an important concurrent piece of financial legislation, what are the respective focuses of the Financial Law and the Financial Stability Law in terms of legislative positioning and core objectives? How do they complement each other functionally?

Zhang Qiaoliang: The two laws are clearly positioned, each with its focus, working together. The Financial Law is the fundamental law of the financial sector, focusing on building the system, setting the framework, clarifying rules, and strengthening regulation. It standardizes the entire process of financial activities and the full chain of financial governance, supporting the three major tasks of serving the real economy, preventing financial risks, and deepening financial reform. The Financial Stability Law is a specialized law for financial risk prevention, focusing on risk prevention, crisis mitigation, bottom-line protection, and safety. It aims to establish a long-term mechanism for risk prevention before it occurs, resolution during the crisis, and disposal afterward, clarifying responsibilities and ensuring that systemic financial risks do not happen.

Together, they form a pattern of normal governance and risk prevention that are mutually reinforcing: the Financial Law provides the institutional foundation for financial stability, while the Financial Stability Law offers a safety barrier for financial development. They jointly build a legal line of defense for national financial security, ensuring the healthy and orderly operation of the financial system.

China Banking and Insurance Journal: In the context of high-level financial opening, how will the Financial Law balance domestic financial security with international rules, and provide legal support for the internationalization of the Renminbi and cross-border financial regulatory cooperation?

Zhang Qiaoliang: Under the background of high-level financial opening, the Financial Law will adhere to a coordinated approach that balances openness and security, ensuring domestic financial stability while aligning with international rules. It will provide strong legal support for the internationalization of the Renminbi and cross-border financial regulatory cooperation.

On one hand, based on China’s actual financial development and security needs, it will improve regulations on cross-border financial activities, prevent risks from abroad, and oversee systemically important financial institutions, firmly safeguarding against systemic financial risks and maintaining national financial security. On the other hand, by referencing international high-standard financial rules and mature legal practices, it will improve regulations on cross-border investment and financing, financial market connectivity, and foreign-related financial dispute resolution, supporting the cross-border use of the Renminbi and the development of offshore financial markets. Additionally, it will clarify mechanisms for cross-border regulatory cooperation, information sharing, and risk management, promoting alignment with major economies’ financial supervision, enhancing China’s voice in global financial governance, and providing a legal framework for steady and far-reaching high-level financial opening through rule of law, marketization, and internationalization.