On March 5, the Fourth Session of the 14th National People's Congress commenced in Beijing. The term "finance" once again emerged as a high-frequency word in the Government Work Report, connecting people's livelihoods with industrial dynamics and carrying new missions and expectations across multiple sections.
According to a tally, the term "finance" appeared 22 times in this year's report, the same frequency as in the 2025 report. It was distributed across four sections: "Review of Work in 2025," "Main Goals and Major Tasks for the 15th Five-Year Plan Period," "Overall Requirements and Policy Directions for Economic and Social Development in 2026," and "Government Tasks for 2026." The most frequent mentions occurred in the "Government Tasks for 2026" section. What adjustments have been made to financial sector tasks this year given the new circumstances, and how will they impact industry development? A detailed analysis follows, based on a comparison of reports from the past two years and interviews with industry experts.
**Enhancing the Toolkit: Diversified Paths for Risk Disposal of Local Small and Medium Financial Institutions** When outlining government tasks for 2026, the report explicitly called for "enhancing resources and methods for risk disposal of local small and medium financial institutions." It emphasized "adhering to market-oriented and rule-of-law principles, and advancing the disposal of high-risk institutions in an orderly manner." The report also stressed "increasing capital replenishment through multiple channels and properly handling non-performing assets of financial institutions."
What are the primary methods currently available for disposing of risks associated with local small and medium financial institutions? A特邀研究员 explained that the current approach follows market-oriented and rule-of-law principles, forming diversified paths that combine self-rescue and external rescue for local small and medium financial institutions.
At the institutional level, the first emphasis is on "shareholder self-rescue, promoting capital increases and expansion, and introducing strategic investors," but this is done with categorization. "For high-risk institutions with salvage value, methods such as mergers and acquisitions, provincial-level unified legal entity integration, and entrustment to high-quality institutions for trusteeship are adopted. For those insolvent and without rescue value, orderly exit is achieved through deposit insurance fund takeovers, market-based acquisitions, or bankruptcy liquidation," the researcher elaborated.
Regarding capital replenishment, beyond issuing special bonds, market-based instruments like perpetual bonds and tier-2 capital bonds are also utilized. "For non-performing asset disposal, comprehensive methods include independent recovery, bundled transfers to asset management companies, debt-to-equity swaps, and asset securitization. The deposit insurance fund and financial stability safeguard fund provide liquidity support according to market rules, while strengthening central-local regulatory coordination and early risk warning," the researcher added.
The 2025 Government Work Report first defined the direction for risk disposal of local small and medium financial institutions: "advancing risk disposal and transformation development in an integrated manner according to market-oriented and rule-of-law principles, and categorically resolving risks through methods such as capital replenishment, mergers and acquisitions, and market exit."
By comparison, if the focus in 2025 was on establishing the direction and path for risk disposal, the 2026 tasks place greater emphasis on "enhancing" resources and methods. What specific resources and methods will be further applied in the future?
The researcher believes the future direction involves building a long-term mechanism with central coordination, local leadership, and market participation. At the resource level, there is potential to further increase the scale of the deposit insurance fund and financial stability safeguard fund, and to normalize the issuance of special bonds for local small and medium banks. Simultaneously, provincial governments could be encouraged to take the lead in establishing regional risk disposal funds, attracting social capital participation. At the method level, considerations could include "granting deposit insurance agencies stronger preemptive intervention rights" and "further improving judicial bankruptcy procedures for financial institutions."
It is noted that models where provincial governments lead the establishment of regional risk disposal funds, particularly those introducing social capital, are still relatively uncommon in practice.
**Strengthening Support for Expanding Domestic Demand and Reducing Intermediate Fees: Dual Challenges for Financial Institutions** The Central Economic Work Conference held in late 2025 listed "adhering to domestic demand-led growth" as the top priority among eight key tasks for 2026, explicitly calling for "deepening actions to boost consumption" and "releasing the potential of service consumption." Data shows that in the first three quarters of 2025, domestic demand contributed 71% to economic growth, demonstrating the significant effects of consumption-boosting policies. However, growth in consumption and investment slowed in the months approaching year-end, indicating that continued efforts to expand domestic demand remain urgent.
In this year's Government Work Report, the section on "Overall Requirements and Policy Directions for Economic and Social Development in 2026" clearly stated the need to "guide financial institutions to strengthen support for key areas such as expanding domestic demand, technological innovation, and small and micro enterprises." So, what tools are available to financial institutions to "strengthen" support for expanding domestic demand?
A chief analyst expressed that financial institutions can rely more on structural monetary policy tools to increase credit allocation for household consumption, key consumption sectors, and weak links. For instance, they can enhance credit support for major消费 such as automobiles and home appliances. Concurrently, by strengthening fiscal and financial coordination, utilizing methods like loan interest subsidies to reduce actual financing costs, and actively innovating financial products suitable for various online and offline consumption scenarios, the precision and accessibility of financial services can be improved.
Alongside strengthening support for expanding domestic demand, the Government Work Report also set regulatory requirements for financial institutions, explicitly calling to "standardize credit market practices and reduce intermediate financing fees." Taking the consumer finance sector as an example, what new adjustments must financial institutions make?
The analyst believes it is first necessary to clarify concepts. "My understanding is that 'intermediate fees' here refer to various additional costs actually paid by borrowers during the credit process, besides principal and interest. These include guarantee fees, service fees, consultation fees, insurance premiums, account management fees, third-party channel referral fees, and platform profit-sharing, as well as other fees that might be charged under names like membership fees or assessment fees in practice." These fees are typically not included in the interest rate stated in the loan contract but can significantly increase the actual financing cost.
The inclusion of "intermediate fees" within a unified governance scope reflects a穿透式监管 approach. In the analyst's view, this shows a significant improvement in the precision and enforcement of current financial regulation. "In response, relevant consumer finance institutions should proactively adjust their fee structures, resolutely cancel unreasonable or duplicate fee items, reduce over-reliance on multi-layered loan assistance and引流 platforms, and compress unnecessary profit-sharing chains. Simultaneously, they should optimize internal assessment mechanisms, promote the internalization of customer acquisition and risk control capabilities, shifting from a past extensive model relying on high fees to cover risks to sustainable operations achieved through refined management," the analyst elaborated.
Similarly, the researcher also pointed out that for the industry, directions for compliant transformation already include "compressing loan assistance chains," "implementing a loan fee list system to make charges open and transparent," and "using digital means to enhance efficiency, reduce operational costs, and achieve inclusive finance under compliance premises."