Nov 30

China Business News: China Increases Regulation of Payments Platforms

Editorial Staff
Jun 24, 2022
China business
Image: Phuong Uyen Vo Hoang via Unsplash.

Welcome   to   China   Business   News,  NEO’s   weekly   roundup   of   top   business   developments   as reported by news outlets in China and the region.

This week’s highlights:

  • China’s Central Comprehensively Deepening Reforms Commission adopted a plan to strengthen the supervision of large-scale payment platform companies to promote the standardised and healthy financial development of technology.  The plan, which was approved June 22, sets its major tasks as improving regulatory rules, making up for the shortcomings of the system, safeguarding payment security and financial infrastructure, preventing and resolving financial risks, and supporting platform enterprises to play a greater role in serving the real economy as well as domestic-international dual circulation. China’s top platform companies obtain a large amount of information on users’ identity, accounts, transactions and social network connections, when they carry out services such as e-commerce, payments and searhces. They then identify their users’ credit status and cooperate with financial institutions to help the users receive loans. However, such operations are equivalent to carrying out personal credit business without permission. Based on the previous regulatory practices of financial regulators, this work plan will, among other things, help to protect the rights and interests of financial consumers, as well as investigate and deal with illegal financial activities in accordance with the law. (21st Century Economy Net)
  • Li Chao, the Vice Chairman of the China Securities Regulatory Commission, highlighted the progress of the financial industry at a press conference devoted to “The China decade”.  The chairman pointed out in his June 23 speech that, over the past decade, the size of the stock market has grown 238.9% and the size of the bond market has increased 444.3%, with both markets ranking second in the world. The number of stock market investors is over 200 million.  From the perspective of industry distribution, the structure of listed companies has undergone fundamental changes. Nearly 2,200 listed companies are in strategic emerging industries, 46 of which have a market capitalization over 100 billion yuan and are becoming an important power source for economic transformation and upgrading.  In terms of operation efficiency, the asset scale of listed companies has tripled compared to ten years ago. Operating income and net profit have maintained a relatively high growth rate, and accumulated cash dividends in the past three years have reached 4.4 trillion yuan, an increase of nearly 50% compared with the previous three years. (Caixin)

  • The bitcoin market, which previously had a total market value estimated at nearly $20 trillion, has collapsed once again. On June 18, the value of one bitcoin fell below $20,000, which is the weakest in 18 months. This time the overall loss of the entire virtual currency market has exceeded $2 trillion. Enormous amounts of wealth have disappeared against the backdrop of this giant flop. The former wealthy top Chinese businessman Zhao Changpeng, who is the founder and CEO of Binance, the largest cryptocurrency exchange in the world, has suffered the heaviest loss. According to Bloomberg data, his accumulated wealth saw a drop of nearly 90% almost overnight, which is equivalent to $85.6 billion. (New Economy Platform 36Kr)
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