What’s new: As China’s fintech sector grows rapidly, it is necessary to properly deal with the relationship between financial development, stability and security, according to an official statement (link in Chinese) released after a meeting chaired by Liu He, a vice premier and head of the financial stability body.
While innovation and entrepreneurship are encouraged, all financial activities should be supervised in accordance with related laws to effectively manage risks, the meeting said. Regulators should treat different enterprises that conduct the same type of financial activity equally, according to the meeting.
The meeting also called for financial regulations and standards which are generally adopted globally to be respected in China.
What’s the background: Some view the remarks as a response to a speech delivered recently by Jack Ma, the actual controller of fintech giant Ant Group Co. Ltd. The speech was made just days before Ant Group’s expected blockbuster concurrent IPO in Shanghai and Hong Kong.
The speech sparked debate among financial professionals by criticizing current regulations for hampering innovation in the name of preventing risks. In that speech, Ma said that the Basel Accords banking regulations are like “a club for the elderly,” as they focus on solving problems from decades ago and issues associated with sophisticated financial systems, whereas China’s financial industry is still young and lacks a mature ecosystem.
Read more: Analysis: Jack Ma Needs a Refresher on How Financial Regulation Works
Contact reporter Tang Ziyi (ziyitang@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)
