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The regulatory changes in China come as President Xi Jinping is placing loyalists into key government positions. (Source photos by Getty Images and Yusuke Hinata)
Market Spotlight

China's debt issues loom as Beijing revamps financial regulation

Changes could make it harder for local governments to borrow, analysts say

ECHO WONG and KENJI KAWASE, Nikkei staff writers | China

HONG KONG -- The centralization of Chinese financial regulation unveiled at this year's National People's Congress strikes many investors as sign of Beijing's concern about the big debts piled up by local governments and their off-budget funding vehicles.

Under the changes made at its annual parliamentary session, China's existing banking and insurance regulator will be replaced by a new agency called the National Financial Regulatory Administration. The People's Bank of China will focus more on macro-economic issues and less on financial regulation.

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