By Tang Guhan
China needs further competition among its financial institutions, said Liu Shijin, a vice-chairman of the China Development Research Foundation, at the Tianfu Financial Forum on Friday.
Liu Shijin, vice-chairman of the China Development Research Foundation, made a keynote speech at the Tianfu Financial Forum held in Chengdu Thursday, Oct. 25, 2018. (Xinhua/Li Lin)
China has advantages in developing Financial Technologies (FinTech). For instance, it has a large market scale and various business models. Meanwhile, it owns infrastructures that support business development. It is said that it requires a week to gather a whole set of parts for a drone in Silicon Valley in the United States while it only takes half a day to finish the task in Shenzhen in south China.
China is at a disadvantage when it comes to its financial tools development. However, this disadvantage turns out to be a benefit nowadays. Americans, for example, love using bank cards for making payments. However, a lot of Chinese people who have not even held a single credit card are using mobile payments for their businesses and when conducting transactions during their daily life across the country. New financial technologies are finding themselves much more accessible and popular in China than places where financial tools have been soundly established.
Liu urged the encouragement of healthy competition among Chinese financial institutions. He said it is significant to mull over measures to effectively and fully promote financial institutions’ competition.
Also, financial institutions are supposed to bear the burden of supporting private enterprises, especially in financing their business expansions.
Financial regulations, on the other hand, are supposed to provide guidelines on directions towards innovation development as well as drawing the lines of what should and should not be done. Enterprises should be allowed to conduct trials before finding the proper financial tools and business models for themselves, he said.
Liu called for turning the large market demand into an impetus for technological innovations in China.
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