BEIJING — Overall financial risks in China have decreased and are generally controllable as regulatory measures take hold, according to an annual report released by the People's Bank of China.

The report, which assessed the stability of China's financial system since 2020, pointed out that the continued rapid expansion of the country's macro leverage ratio was curbed effectively, various high-risk institutions dealt with in an orderly manner, and risks related to shadow banking reduced.

Financial order was restored comprehensively during the period, the report noted.

Businesses of peer-to-peer (P2P) lenders have all been shut down as a result of regulatory crackdown on the sector, where investors sidestep traditional lenders such as banks to lend directly to borrowers. Illegal fundraising, cross-border gambling, underground banks and other illegal financial activities were curbed.

Progress has been made in forestalling risks related to private equity funds and financial assets trading venues, while regulation of large fintech firms was strengthened, according to the report.

Solid efforts should be made to advance reform of small and medium-sized financial institutions to defuse risks and lower credit risks, as well as ensure the stable operation of stock, bond and foreign exchange markets and prevent the impact of external risks, said the report.