China will set up a financial watchdog run by the Communist Party, state media reported on Thursday, as part of a broad reorganisation of governing bodies set to give the ruling party direct control and supervision over financial affairs, Reuters reported. The creation of the Central Financial Commission will see the dissolution of the state-run Financial Stability and Development Committee (FSDC), a powerful body set up in 2017 and headed by former Vice Premier Liu He to curb risks in China's complex and often opaque financial system. The new watchdog will be responsible for the top-level design, development and supervision of the financial sector, strengthening "unified leadership on financial work", according to a plan published by state media. To strengthen the ideological and political role of the party in China's overall financial system, a separate Central Financial Work Commission will also be established. The reorganisation of party and state-run financial bodies comes after Xi Jinping secured a precedent-breaking third term as party leader in October and also a new term as president earlier this month, making him China's most powerful leader since Mao Zedong.
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