A restriction on the number of banks that a single fintech platform can partner with could be imposed by Chinese authorities, said the country’s former finance minister Lou Jiwei. That measure could be taken up to not allow any such platform to gain too much of market share that is desired by the authorities, said reports published in the Chinese state media on Sunday.
Warnings about closer scrutiny being imposed for the tech giants of the country were issued last month by the banking and financial regulators of China. There was an abrupt suspension of a planned and announced dual listing of Alibaba’s Ant Group – touted to have been the largest initial public offering of the world, worth a total of about $37 billion last month.
According to a report published by the Securities Times, Lou warned that bad loans could be the result of a fintech platform that manages to gain an oversized market share. Lou said this while speaking at a wealth management forum on Saturday. Lou is one of the influential personalities and is the external affairs director at a top advisory body to the Chinese government.
“We can limit the number of banks that any single platform can work with, so as to let more platforms do similar businesses under the same conditions,” he said, and added that regulators should not allow fintech companies to grow to such proportions that they reach the point of “winner takes all” and “too big to fail” positions in the market.
There is currently greater oversight of the big tech companies of China, which includes the likes of Alibaba Group Holding and Tencent Holdings which are considered to be among the top ranked tech companies of the world as well as amongst the most valuable. In the course of providing their services, many of these tech companies have gathered large amounts of user data.
The Chinese government should consider the proposition of imposing a digital tax on those technology companies that currently possess copious amounts of user data, a securities watchdog official in Beijing was quoted as saying in a news report published last week by Chinese state media.
Large tech companies such as Alibaba were imposed fines last week by regulators for not being able to make proper reporting of their past deals for antitrust reviews. This is the first occasion that any internet company in China has been imposed a fine for breaching of a 2008 antimonopoly law.
(Adapted from Reuters.com)