China is home to multiple fintech giants, from Ant Financial to Lufax, and yet the Chinese government appears to have mixed views on how far it is willing to allow fintech to go before it yanks on the leash.
Most conspicuously, China is dealing with a proliferation of so-called "bad" P2P lenders, from platforms engaged in outright Ponzi schemes (Ezubao), to those experiencing rising non-performing loans. This has forced it to rein in more adventurous (and potentially detrimental) sectors and participants.
Yet, this hasn't stopped the Chinese government from pressing on with regulations intended to benefit the burgeoning fintech sector, suggesting that the Chinese government is crafting a nuanced regulatory environment.
The P2P phenomenon also comes at a time bad loans in China are near the highest in a decade and state-owned banks are setting aside less capital to account for that soured debt.Yet for all the negative noises, Beijing is championing the Internet for many kinds of transactions that were once the domain of banks. Its Internet Plus Circulation action plan, unveiled in April, will boost infrastructure for third-party payment services, giving a fillip to fintech players like Alibaba and Tencent.