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China Urges International Cooperation on Financial Services, Technology Regulation

2021-01-28 13:25:10
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SHANGHAI— China's regulators want to intensify exchanges with international counterparts and strengthen cooperation on antitrust issues, data handling and consumer protection, the deputy governor of China's central bank said in an op-ed by the Financial Times.

Pan Gongsheng said authorities wanted to ensure fintech regulation was effective, measured and would guard against cross-border regulatory arbitrage and contagion.

Fintech was essentially still finance, so the principle of "same company, same rules" should apply, he added in the article published Wednesday.

“We need regulations that emphasize the content, not the shape of a company. The goal is to align business rules and standards with regulations to avoid arbitration, ”he wrote.

"It's not an easy task. We have to try hard and work together."

His comments come as China tightens controls over its technology giants, particularly those who have become financial services, by creating new anti-monopoly rules and guidelines and reversing a once laissez-faire approach.

The new approach saw the abrupt suspension of Ant Group's $ 37 billion IPO in November, which dealt a major blow to the fintech arm founded by billionaire Jack Ma.

Authorities have also put in place a slew of other financial regulations, including stricter antitrust requirements for non-bank payment companies and stricter data collection rules for personal credit activities.

Pan said that in the early days of the industry, China had "put in place a cautious but inclusive regulatory environment for fintech development," but that regulatory gaps still needed to be addressed and financial risks mitigated.

A practice of some large companies of using the profits of their other companies to unfairly gain fintech market share has been a global problem, he added, citing the European Union's sanctions in the Google and US Antitrust Cases of Alphabet Inc. Facebook Inc., Apple Inc. . and Amazon.com Inc. as examples.

"If we insist on proper oversight, equal access and fair competition, fintech will evolve in a way that balances capital expansion, innovation and public interests, and evolves technology forever," he said.

"It's not an easy task. We have to try hard and work together."

China's main banking and insurance authority also said on Wednesday that it would strengthen banking and insurance supervision with internet platforms by 2021.

It would also drive large banks to offer risk management tools and models to smaller banks, a services sector that used to depend on the country's major fintech players.

(Reporting by Brenda Goh; additional reporting by Cheng Leng; edited by Sam Holmes and Stephen Coates)

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