China will tighten oversight of its sprawling asset management industry as it moves to rein in financial risks, a senior central bank official said in remarks published on Friday.
Ruan Jianhong, head of the Survey and Statistics Department at the People's Bank of China (PBOC), said the financial sector had shown "deviation", with speculative activities rife in the fast-growing asset management industry.
Banks, insurers and brokerages have developed complicated asset management products involving different industries and markets in the name of "innovation", as returns from the real economy shrink, Ruan told state-owned Financial News in an interview.
Asset management products totaled 80 trillion yuan ($11.64 trillion) in the first half of 2016, she said.
Reuters reported earlier that China's financial regulators had circulated a draft framework of new rules aimed at curbing risks in the booming asset management industry.
Ruan said China would push financial institutions back to their role of supporting the real economy and change their tendency to "seek scale and short-term profits".
The financial sector accounted for 8.3 % of China's gross domestic product in 2016, higher than that of some major developed countries, up from an average of 4.4 % between 2001 and 2005, Ruan said.
China's monetary policy this year will contain risks posed by debt, prevent asset bubbles and keep economic growth on track, the central bank's chief economist said on Thursday.
Ruan said China would control the total amount of money but keep liquidity basically stable.
($1=6.8712 Chinese yuan renminbi)