HONG KONG — China’s president, Xi Jinping, has handed the reins of the country’s financial system to a close ally, strengthening his hold over the world’s second-largest economy and sending a clear signal that companies must reduce risky borrowing.

Liu He, an economic adviser to Mr. Xi and previous leaders, was appointed on Monday as vice premier overseeing financial and industrial policy after a ritual vote by China’s legislature, the National People’s Congress. His title comes with greater powers after a move by Mr. Xi to centralize control over the financial sector by consolidating banking and insurance regulators. Mr. Liu’s closeness to Mr. Xi appears likely to enhance his influence.

Mr. Liu’s elevation was another step toward cementing Mr. Xi’s control over nearly every facet of Chinese political and economic life. The congress, which is holding its annual meeting in Beijing, voted last week to eliminate a presidential term limit on Mr. Xi, potentially extending his rule deep into the next decade and maybe much longer.

But Mr. Liu’s appointment also signals that Mr. Xi has grown more serious about fixing a financial system groaning under the weight of a decade-long borrowing spree that has left it riddled with shadowy risks, economists said.