The annual meeting of the National People’s Congress (NPC) of China has come up with a decision to merge banking and insurance regulators as a part of structural changes of the government.

This financial reform has been identified as a key task for Bejing to reduce the risk in Chinese financial sector. According to the financial experts, this move of combining the insurance and banking bodies will contribute to a reduction of systematic risk in the Financial sector.

Under the merger, China would establish a central regulation authority to oversee both Chinese banking and insurance sector. According to the President Xi Jinping’s top economic advisor, Liu He, this type of reforms will be significant to scrap the inefficiencies of the state-run agencies.

As China is focusing to strengthen the economy by enforcing more control over it, the government is monitoring the financial industry as well as the borrowings closely. The concerns raised on this matter were due to excessive borrowings by some Chinese firms and state-owned enterprises.

The Central Bank governor of China says it is mandatory to close the loopholes of the financial regulatory system in order to reduce financial-risk of the nation.

New ministries to monitor natural resources, immigration, culture, and tourism, as well as the environment will be formed as part of the government reforms. The intellectual property rights bureau will also be restructured accordingly.

Beijing’s commitment towards its three critical battles; continuing efforts to resolve major risks in the economy; a new campaign against poverty; and a continued fight to reduce pollution are the ultimate goals behind the new structural change in China.