BEIJING — China plans to overhaul its financial regulatory system by consolidating aspects of the central bank and securities regulator under a new entity, while doing away with the existing banking regulator.

That's according to a draft released late Tuesday as part of China's ongoing annual parliamentary meeting, known as the "Two Sessions." Delegates are set to approve a final version on Friday.

The changes follow similar adjustments to China's government structure that have occurred roughly every five years over the last few decades. The moves also come as Beijing has increased regulation on parts of the economy that had developed quickly, with little oversight.

The latest plan calls for the establishment of a National Financial Regulatory Administration, which replaces the China Banking and Insurance Regulatory Commission and expands its role.

The new regulator is set to oversee most of the financial industry — except for the securities industry. Responsibilities include protecting financial consumers, strengthening risk management and dealing with violations of the law, the draft said.

The China Securities Regulatory Commission's investor protection responsibilities are set to shift to the new financial regulator.

The People's Bank of China's responsibilities for protecting financial consumers and regulating finance holding companies and other groups are also set to shift to the new administrator.

"China's regulatory reforms will strengthen regulators' capability to establish and enforce a unified regulatory framework, as well as reduce the room for regulatory arbitrage," David Yin, vice president, senior credit officer, at Moody's Investors Service, said in a note.

"In addition, the reform targets to strengthen the central government's control of financial regulation at the local government level, which will improve regulatory enforcement and reduce local governments' influence on financial institutions," Yin said.

Separately, the draft proposed the PBoC consolidate its local branches with greater central control, and changing the securities regulator's designation within the State Council from one similar to the council's Development Research Center to that of the customs agency.

"China's consolidated financial regulatory body is [a] paradigm shift to ramp up oversight of its vast financial system," said Winston Ma, adjunct professor of law at New York University.

The proposed changes also establish a new National Data Bureau for coordinating the establishment of a data system for the country and promoting the development of the so-called digital economy, which includes internet-based services.

The proposal did not go into much detail, but noted the new bureau would take on some of the cybersecurity regulator's responsibilities.

Ma said he expects the new regulatory agencies would develop new approval processes for data-intensive internet companies wanting to go public overseas.

The National Data Bureau is set to operate under the National Development and Reform Commission, which is the economic planning department of the State Council — the Chinese government's top executive body.

The proposed changes to the State Council come as the ruling Communist Party of China is expected to significantly increase its direct control of the government.

Party leaders already fill top government roles. For example, Xi Jinping is general secretary of the party and president of the People's Republic of China.

Xi is set to formally gain an unprecedented third term as president on Friday.

Over the 10 years of his first two terms, Xi has pushed for unifying the country under the Chinese Communist Party and "Xi Jinping Thought."

Further changes to increase the party's control of China's government are expected to be revealed this month. The draft of changes to the State Council's structure cited a document — that translates literally from the Chinese text as "Party State Institutional Reform Plan" — passed last week at a regular meeting of the Chinese Communist Party's Central Committee.

Changes to the party and state institutions "strengthen the centralized and unified leadership of the Chinese Communist Party's Central Committee over science and technology work," State Councilor and Secretary-General of the State Council Xiao Jie said in a supplementary document explaining the proposed structural changes. That's according to a CNBC translation of the Chinese text.

The changes "establish the Central Science and Technology Commission," whose responsibilities are borne by the restructured Ministry of Science and Technology, Xiao said.

The State Council restructuring draft released Tuesday led with plans to overhaul the Ministry of Science and Technology, to strengthen its work in areas such as research and national laboratory construction.

China must work faster to achieve self-reliance in tech "in the face of severe international scientific and technological competition and external containment and suppression," Xiao said.

The Biden administration has increased restrictions on the ability of Chinese businesses to obtain critical tech for the use and development of high-end semiconductors.

The new Ministry of Science and Technology's responsibilities include resource allocation and supervision, while oversight of agriculture science and biotech are set to be moved to other ministries, Xiao said in the supplementary document.

High-tech development and industrialization plans fall under the Ministry of Industry and Information Technology, the document said.

The proposed changes to the State Council's structure also called for separating the ownership and operation of state-owned institutions that are overseen by central government financial management, Citi analysts pointed out.

They said they see the move as further leveling the playing field between state-owned and non-state-owned enterprises.