While China has obviously morphed from a command economy to one that has wholeheartedly embraced the benefits of capitalism and a market economy there still remains substantial central planning. The current Belt and Road initiative is all about global development and increasing China’s influence around the world.
In April of this year, H.E. Li Keqiang, Premier of the State Council of the People’s Republic of China, had this to say about Fintech:
“We need to earnestly implement the Science, Technology, and Innovation Partnership, hold a successful Conference on Innovation Cooperation, and foster new areas of innovation cooperation such as digital economy, e-commerce, Fintech, and smart cities. We need to work together to maintain a fair, just and non-discriminatory market environment to pave the way for progress in innovation cooperation.”
In late August, the People’s Bank of China (PBOC) announced their “Fintech Development Plan” for 2019 to 2021. The plan seeks to further develop financial technology and to lead at the international level. According to a release by the PBC, the plan has identified six key tasks. The goals are itemized below, (translated from Chinese):
- First, strengthen the strategic deployment of financial technology, strengthen the top-level design from a long-term perspective, grasp the development trend of financial science and technology, and do a good job in overall planning, system and mechanism optimization, and talent team building.
- The second is to strengthen the rational application of financial technology, focus on breakthroughs to drive overall development, standardize the selection, capacity building, application scenarios and safety control of key common technologies, comprehensively improve the application level of financial technology, and build financial technology into a high-quality financial development. New engine.”
- The third is to enhance the quality and efficiency of financial services, rationally use financial technology to enrich service channels, improve product supply, reduce service costs, optimize financing services, improve the quality and efficiency of financial services, and make financial technology innovations better benefit the people’s livelihood. Promote the healthy and sustainable development of the real economy.
- The fourth is to strengthen the financial risk prevention and control capabilities, correctly handle the relationship between security and development, use financial technology to enhance the identification, early warning and disposal capabilities of cross-market, cross-industry and cross-regional financial risks, and strengthen network security risk management and financial information protection. Good new technology applies risk prevention and firmly holds the bottom line of systemic financial risks.
- The fifth is to strengthen financial science and technology supervision, establish and improve the basic rules system for supervision, accelerate the formulation of basic rules for supervision, monitor analysis and evaluation, explore the management mechanism of financial science and technology innovation, serve the comprehensive statistics of the financial industry, and enhance the professionalism and unity of financial supervision. Penetration.
- The sixth is to strengthen the foundation of financial science and technology, continuously improve the ecology of financial technology industry, optimize the industrial governance system, and support the healthy and orderly development of financial technology from the aspects of technological research, legal construction, credit services, standardization, and consumer protection.
Historically, China has been the largest contiguous Fintech market in the world. This includes a wide spectrum of services including blockchain development and the anticipated Central Bank Digital Currency (CBDC). It has been reported that the PBOC will issue their CBDC as soon as November 11 distributed through big banks and big tech including Alibaba, Tencent and more. If the report is accurate, China will be the first country to issue a CBDC instead of just hypothesizing about the benefits of a virtual currency managed by a central authority.