Fintech industry continues to grow, consolidate and evolve, causing mutations in the global landscape of countries trying to get on top of the ranking of importance in the field. China has emerged as a key player, not just for Asia but for the world, with a massive ecosystem of financial technology, which includes, for example, the Ant Financial Services Group, Tencent Holdings and JD.com, and it has been expanding with a significant growth rate. Increasing market size and general public interest eventually has led to more attention from the government and the Chinese financial institutions, and in August China’s central bank announced a new ambitious three-year development plan for the industry. Let us take a look at the main points.
The People’s Bank of China (PBC) presented this plan by declaring that its aim is to increase the value and quality of provided financial services, strengthen the regulations targeted to financial technology innovation, and last but not least – to prevent systemic financial risk, something that has been discussed heavily in China over the past few years.
Policy framework is planned to be built as part of the 2019-2021 plan, with extended risk controls, including “an early warning regime on cross-market and cross-industry financial risks” and with new rules to regulate the financial holding companies that are operating in China, said the central bank, talking in particular about the creation of “four beams and eight pillars”.
As previously reported by Crowdfundinsider, the PBC has identified and highlighted six main tasks in this this plan, and key goals are the following:
- Encourage the deployment of financial technology and the top-level design from the long-term perspective.
- Strengthen rational application of financial technology, with a focus on the breakthroughs to stimulate the overall development.
- Enhance the quality of financial services provided to people, improving the supply and reducing the costs, while promoting “sustainable development of the real economy”.
- Improve security, increasing financial risk prevention and control, using new technology to enhance risk identification, prevention and management, in order to reduce systemic financial risks.
- Strengthen financial science and technology, while setting rules for supervision, financial monitoring and evaluation.
- Reinforce the foundation of the financial technology industry, optimizing the industrial governance system, supporting the sustainable development of fintech from the aspects of “technological research, legal construction, credit services, standardization, and consumer protection”.
All in all, the whole plan is thought to further support the growth of all this high-potential and high-impact industry, and consolidate the position of China as a global powerhouse in financial technology, while keeping the financial system safe and sound for citizens and investors. Fintech in China is seen as the future engine of a greatly improved country’s financial industry, and the Chinese are now clearly moving forward to support this explosive growth.
China is currently seeking to become world’s economic superpower, and its influence has been growing not only in Asia, but all over the world. What happens in China, will most likely eventually have an impact of the rest of us, therefore it is worth observing and analyzing the ongoing socioeconomic processes in this country, in order to learn a thing or two.