(March 2021)
The Premier of the state council of China, Li Keqqiang, announced plans to increase oversight and regulation in the country’s financial and fintech sectors. This comes as an addition to an over 3-year long saga of back and forth between the government regulators and the inscrutable financial sector. The aims are to create an economy that serves the people and the real economy, but in practice, it will very much curb the growing role of technology companies in finance. Giants in Chinese technology, such as Tencent and Ant Group Co., will be particularly hard hit by the new regulations. Microlending restrictions already shook up Ant Groups’ initial public offering, placing it on hold. Regulators are also artificially lowering rates on lending and extending repayment timelines for small businesses.
(New York)
FINSUM + Magnifi: Regulation over the Chinese economy appears to be yo-yo-ing between growth and control over the last two decades. These economic decisions will undoubtedly hurt China’s biggest technology firms but might provide stability and transparency for the growing economy.
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