Over the past year, China’s once-flamboyant financial sector has been subject to strict oversight and rigorous regulatory compliance – a tightening of rules that has dampened moods and slammed shut pocketbooks that had been overflowing for decades.
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While this change had already been in motion before the twice-a-decade central financial work conference was held, exactly one year ago – a meeting where President Xi Jinping set forth the goal to forge China into a “financial powerhouse” – weaker-than-expected growth for the world’s second-largest economy has complicated matters.
At banks and securities firms alike, pay cuts have been rampant. The industry has also seen occasional lay-offs – a rare phenomenon for a field worth 481 trillion yuan (US$67.4 trillion) and mostly consisting of state-owned institutions.
At the same time, a structural overhaul has been gathering pace as more resources are diverted to bigger market players, with the smaller specimens consolidated through mergers and acquisitions.
“We had a big meeting and again they kept talking about the seriousness of the situation,” said a Shanghai-based analyst at a top Chinese investment bank on Monday. He spoke on the condition of anonymity.
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For the analyst, the biggest change the industry has seen in the past year is much stricter regulatory supervision – though he said this is not necessarily a bad thing.