As CRI’s Luo Wen reports, the country is expecting the development of the emerging industry to help encourage innovation and entrepreneurship.
The guideline was jointly released by ten central government ministries and industry regulators, including the central bank, the Ministry of Finance and the China Securities Regulatory Commission.
It was rolled out less than one month after the country unveiled an action plan for its “Internet Plus” strategy that is expected to bolster an innovative economy.
The guideline includes a raft of policies and measures that aim to standardize the development of Internet finance, encourage innovation and increase awareness of risk control among internet-based financial institutions.
It promises support for financial institutions to open online banking, insurance and securities businesses and Internet companies to set up online payment service, build online lending platforms and equity and crowd financing platforms.
It also says eligible institutions will be encouraged to get listed on the main board and growth board, while smaller institutions can enjoy tax concessions at the start-up stage.
Professor Yang Dong with Law School of Renmin University of China says the development of internet finance will benefit micro and small-sized enterprises with easier access to investment and wider channels to raise funds.
“To develop inclusive financial system to enable micro, small and medium-sized enterprises to get more financing conforms to the current economic situation of China and provides the foundation for the real economy to develop and for the masses of people to participate in starting new businesses and making innovations.”
Internet finance refers to loans, investments and other financial services provided through online channels rather than through traditional banks and other financial institutions.
Last year, the industry registered over 300 billion yuan, or nearly 48 billion US dollars, in business volume.
The sector involved about 390,000 employees last year and served more than 2 million enterprises, with about 60 million people working in relevant industries.
The guideline also stipulates that the people and organizations engaging in Internet Finance must abide by certain rules.
It pledges protection of consumers’ rights and information security and underscores self-discipline among Internet finance players.
Yang suggests there should be a certain threshold for market entry.
“The platforms that are not up to the required qualification and incompetent in risk control and in internet technologies should be locked out of the market, leaving only the good ones that really serve the real economy, inclusive financial system, the common people and the sustainable development of the Chinese economy.”
According to the guideline, a credit information sharing platform will be built for market players, while the credits of online finance companies will be rated.
Meanwhile, it calls on government departments at all levels to actively encourage innovation in e-finance platforms, products and services.
Government departments are also urged to cut red tape and improve related fiscal and taxation policies to pave way for the industry’s development.