China's top financial regulator underscored the critical importance of strictly holding the bottom line of preventing major financial risks at the 2026 regulatory work conference of the National Financial Regulatory Administration on Thursday.

The meeting called for strong, orderly, and effective efforts to advance the resolution of risks at small and medium-sized financial institutions, with a focus on addressing existing risks, resolutely curbing new risks, and avoiding the pitfalls of major financial risks. It also urged the steady promotion of the normalized operation of the city-level real estate financing coordination mechanism to help build a new model for real estate development, and the provision of lawful and compliant support for resolving debt risks at financing platforms.

Additionally, the meeting stressed the need to enhance the financial industry's capacity for high-quality development, steadily advance the reduction in number and improvement in quality of small and medium-sized financial institutions, rationally optimize the institutional layout, thoroughly address disorderly competition, and urge banking and insurance institutions to focus on their core businesses and pursue differentiated development, while advancing high-standard financial opening-up.

The meeting also called for strengthening financial supply to promote consumption and expand investment, and for providing efficient support for the strategy of expanding domestic demand. Moreover, the meeting emphasized optimizing financial services for technological innovation, actively fostering patient capital to support the development of new quality productive forces, better leveraging the financing coordination mechanism for small and micro enterprises, and improving financial services for new forms of employment.

The NFRA meeting reinforced the directives from the annual Central Economic Work Conference in December that highlighted the need for China to adopt a firm stance in 2026 on safeguarding against risks in key areas.

Efforts should focus on stabilizing the real estate market by implementing city-specific measures to control new construction, reduce inventory, and optimize supply. Local government debt risks must be addressed proactively and orderly, the Central Economic Work Conference said.

jiangxueqing@chinadaily.com.cn