(Yicai Global) Jan. 21 -- China’s top legislative body approved the establishment of the country’s second financial court in Beijing yesterday to hear finance-related cases, unify judicial standards in the sector and improve trial efficiency.

The Beijing Financial Court will have the same jurisdiction level as the Intermediate People’s Court in Beijing, said Zhou Qiang, president of the Supreme People’s Court. It will handle finance-related civil, commercial and administrative cases. This follows the establishment of the Shanghai Financial Court in August 2018.

The National People’s Congress chose Beijing because a large number of financial institutions are headquartered in the capital, Hu Rongen, dean of the School of Economics and Law at Shanghai University of Political Science and Law, told Yicai Global. With a well-developed financial sector, the city has many financial disputes, he added.

“The establishing of a financial court in Beijing will be conducive to improving the financial adjudication system, creating a sound financial legal environment and enhancing China's international judicial influence,” said Qu Feng, senior partner of Dentons Shanghai law firm.

Although China’s law is set by statutes rather than case law, which refers to the outcome of former cases, the financial court will set an example for financial adjudication cases, Qu said. It will also help build a direct connection with regulatory authorities in order to better mitigate financial risk.

An additional court will increase the rate of case closure. Some 70,000 financial dispute cases have been lodged at the Beijing Intermediate Court over the last five years. Plaintiffs complain of long trial periods, low enforcement rates, debtors’ inability to repay after being punished for dishonesty and difficulties for banks to claim creditor's rights.

Editors: Tang Shihua, Kim Taylor