PBOC Reaffirms Strengthened Supervision of Fintech Firms Including Ant Group

Restrictions on Small Loan Product Sales Using Customer Information
Yuan Exchange Rate Maintains Stability at a Reasonable Level

[Asia Economy Beijing=Special Correspondent Jo Young-shin] The People's Bank of China, the central bank of China, has reiterated its stance to strengthen the management and supervision of fintech companies' financial activities.

According to Jeil Financial News on the 7th, the People's Bank of China, after concluding the '2021 New Year Work Meeting' chaired by Governor Yi Gang the previous day, stated in a press release, "We will closely supervise and manage the financial activities conducted by internet platform companies," and "We will thoroughly implement the guidelines of the Party Central Committee and the State Council on preventing monopolies and disorderly expansion of capital."

The People's Bank of China particularly emphasized that it will strictly prohibit internet companies from excessively promoting financial products that induce customers to incur excessive debt.

Alipay logo (Photo by Reuters Yonhap News).

This is interpreted as a determination to suppress small loans that were actively conducted through Zhifubao (Alipay), an electronic payment application operated by Ant Group. The Chinese leadership believes that fintech companies maximizing profitability by indiscriminately selling loans, insurance, and financial investment products could cause turmoil in the financial market.

In fact, the small loan sector accounted for 40% of Ant Group's revenue in the first half of last year.

Additionally, the People's Bank of China reiterated the principle that a business license is mandatory to conduct personal credit evaluation services. Chinese financial authorities suspect that Ant Group has been using the vast personal information of customers left on Alibaba's various platforms to conduct loan business.

Regarding the yuan exchange rate policy, the People's Bank of China also presented the principle of maintaining the yuan exchange rate at a reasonable and stable level. This is interpreted as an intention to tolerate yuan appreciation for the time being.

Along with this, it announced plans to cautiously promote the internationalization of the yuan this year.

The People's Bank of China also indicated that various tests related to the introduction of legal digital currency will be conducted "appropriately." Since the second half of last year, China has been conducting public tests of digital currency involving tens of thousands of ordinary citizens.

This content was produced with the assistance of AI translation services.