FINTECH: Two Sessions Sends Strong Signals on Support for Chinese Fintech Development

Delegates to the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) have submitted a slew of opinions and recommendations for China’s fintech sector, reports the China Banking News.

• 'Pony Ma (马化腾), NPC delegate and chair and CEO of internet giant Tencent, has submitted seven written proposals at the Two Sessions this year, touching upon multiple areas including the Industrial Internet, the Greater Bay Area, basic scientific research and environmental protection.'
• 'Zhang Jin (张劲), CPPCC and chair of Cedar Holdings, called for the establishment of a shared service platform for supply chain financing that makes use of technologies including big data and the blockchain, and is connected to key participants including financial institutions, core enterprises, small and medium-sized enterprises and third party logistics providers.'
• 'Liu Shangxi (刘尚希), CPPCC representative and head of the Chinese Academy of Fiscal Sciences, also pointed to the ability of fintech to resolve the financing challenges of small and medium-sized enterprises.'

China already leads in fintech - mobile payments, online lending, consumer finance, online money-market funds, online insurance, personal financial management, and online brokerage.

Take payments. According to Peterson Institute's Martin Chorzempa:

• 'When American Internet companies began to take off in the 1990s, credit cards were ubiquitous and joined into international networks. American ecommerce sites simply needed to accept credit cards to handle payments from anywhere in the country and even abroad.'
• But, because of 'the backward state of China’s payment infrastructure in the early 2000s, when Internet companies were beginning to expand,' ecommerce firms were forced to develop their own payment tools to build nationwide businesses.
• 'Tencent (China’s largest social and gaming company) and Alibaba (its largest ecommerce company) built their own payment systems.'

In effect, the country has leapfrogged from cash to mobile payments, bypassing the payment cards system,' says Brookings' David Dollar.

• 'Behind China’s fintech miracle lies the country’s unique technology ecosystem: a tech-savvy population, an underdeveloped banking industry, and an initially relaxed regulatory environment.'
• 'China’s remarkably unsophisticated banks stand in marked contrast to its well-developed technological infrastructure and soaring demand for financial services.'

China's government is paying more and more attention to fintech and its regulation (think peer-to-peer lending). So expect these proposals to get both attention and maybe pushback.

'Two Sessions' I

More articles from this issue

1. Facing slowing economic growth, China’s premier promises relief for business

2. Six key takeaways from China's annual policy blueprint

3. China’s Stimulus Muddle Deepens

4. China’s ‘two sessions’: an economic watershed or more of the same?

5. Xi Jinping Works to Stifle Dissent Amid Concerns About China’s Economy

6. FINTECH: Two Sessions Sends Strong Signals on Support for Chinese Fintech Development

7. How tea is served in the Great Hall of the People in China

8. 'Two Sessions': A rap song extolling China's annual political meeting

March 9, 2019

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