China’s NPC Advances Landmark Financial Law in Major Session

China’s top legislative body, the Standing Committee of the National People’s Congress (NPC), concluded its 23rd session on June 26 after four days of intensive deliberations in Beijing, advancing a sweeping package of legislative reforms that signal Beijing’s determination to overhaul its financial regulatory architecture and deepen market integration.

The session, presided over by NPC Standing Committee Chairman Zhao Leji, reviewed 10 draft laws and multiple government reports, marking one of the most consequential legislative meetings of the 14th NPC, according to People’s Daily.

Landmark Financial Legislation Takes Center Stage

The most significant development was the first reading of the Financial Law Draft (金融法草案), a foundational 11-chapter, 95-article bill designed to serve as China’s first comprehensive basic law coordinating all financial sector legislation. As reported by Xinhua News Agency, the draft aims to fill a long-recognized gap in China’s legal framework, where sector-specific laws on banking, insurance, and securities existed without a unifying legal foundation.

Minister of Justice He Rong, presenting the draft to lawmakers, explained that the Financial Law is intended to “play a guiding, commanding, and standardizing role” over all financial sector laws, covering central banking, financial institutions, financial products, market systems, regulation, and risk disposal mechanisms.

Alongside the Financial Law, lawmakers also conducted the first reading of the People’s Bank of China (PBOC) Law Revision Draft — the first major update to the central bank law since 2004. The 8-chapter, 54-article revision, presented by PBOC Governor Pan Gongsheng, strengthens the central bank’s role in financial stability and macro-prudential management, and introduces extraterritorial application and countermeasure provisions, according to the NPC official website.

Unified National Market: Breaking Down Local Barriers

A major focus of the session was the construction of a “unified national market” (全国统一大市场), a core policy priority under the Xi Jinping administration. On June 24, a joint committee meeting was held featuring a special inquiry session where Vice Premier Zhang Guoqing and multiple cabinet ministers fielded questions from lawmakers.

NDRC Vice Chairman Li Chunsheng reported that the unified market’s “four beams and eight pillars” (四梁八柱) — its foundational framework — have been “basically established,” with social consensus “significantly increased.” The report highlighted measurable progress: the ratio of social logistics costs to GDP fell from 14.1% in 2024 to 13.9% in 2025 — the first time below 14% — while inter-provincial trade sales rose from 39.8% of total sales in 2022 to 41% in 2025, as detailed by People’s Daily.

However, Finance Minister Lan Fo’an delivered a candid assessment, acknowledging that “certain local governments’ illegal subsidy behaviors continue despite repeated bans,” calling this a “prominent bottleneck” constraining unified market construction. He announced that the State Council has decided to implement a negative list system for local government subsidies.

SAMR Head Luo Wen reported that fair competition review has achieved “full coverage” across all four levels of government — national, provincial, municipal, and county — with institutional constraints on administrative intervention in market competition strengthened.

Legal Profession Reform and Greater Bay Area Integration

Lawmakers reviewed the Lawyer Law Amendment Draft, which codifies the successful pilot program allowing Hong Kong and Macau lawyers to practice in nine mainland cities of the Greater Bay Area. The pilot, first authorized in 2020 and extended to October 2026, has seen 646 lawyers — 544 from Hong Kong and 102 from Macau — obtain practicing certificates, according to a government report reviewed by the session.

The amendment, which strengthens Party leadership over the legal profession while expanding foreign-related legal services, represents a significant step in integrating Hong Kong’s common law professionals into the mainland legal system, as reported by People’s Daily.

Other Key Legislation Under Review

The session also conducted second readings of several bills, including:

• Trademark Law Revision Draft — strengthening regulation of trademark registration and cracking down on misleading use of registered trademarks
• Certified Public Accountant Law Amendment Draft — enhancing integrity requirements and refining legal responsibilities
• Procuratorial Public Interest Litigation Law Draft — expanding areas for public interest litigation
• Antarctic Activities and Environmental Protection Law Draft — strengthening environmental protections
• National Fire and Rescue Personnel Law Draft — enhancing occupational protections

New submissions included the Government Procurement Law Revision Draft and the Bidding and Tendering Law Revision Draft.

Fiscal Oversight and Forward Outlook

The session reviewed the 2025 Central Final Accounts, which showed central general public budget revenue of 9.40 trillion yuan and expenditure of 14.49 trillion yuan, with a fiscal deficit of 4.86 trillion yuan — in line with budget targets. Auditor General Hou Kai presented the audit report, noting that 260-plus cases of serious violations involving over 1,100 individuals and 91 billion yuan were identified and referred for further investigation.

Chairman Zhao Leji also reported on his official visits to Kazakhstan and Russia, underscoring ongoing parliamentary diplomacy with key strategic partners.

What to Watch For

The simultaneous advancement of the Financial Law and PBOC Law revisions signals a comprehensive restructuring of China’s financial regulatory architecture. Key questions remain: whether these landmark bills will pass in this session or require further deliberation, what specific measures will be included in the negative list for local subsidies, and how the unified market evaluation indicator system will be designed and implemented. The answers will shape China’s economic governance for years to come.