China’s payments and fintech sectors will ‘play a bigger role’ in reviving the economy, President Xi says, a positive signal for big tech

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President Xi Jinping voiced his support for China’s mobile payment and fintech platforms on Wednesday at a senior leadership meeting, where he encouraged those operators to “play a bigger role” in bolstering the world’s second largest economy.

This meeting of the Central Commission for Deepening Comprehensive Reforms, a policy formulation and implementation body led by Xi, approved a work plan on “improving regulation of major payment platforms, while promoting the regulated and healthy development of payment and fintech businesses,” according to an official. statement issued by the official Xinhua news agency.

Xi said China’s payment and fintech platforms should “go back to their roots,” which is a veiled reference to refrain from disorderly expansion and anti-competitive behavior that had brought major risks for the Chinese financial sector.

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Although no specific company was mentioned at the meeting, the positive signal from the commission may bode well for Ant Group, the world’s largest fintech company and operator of payment services giant Alipay. Hangzhou-based Ant has been undergoing a state-guided restructuring process since its initial public offering (IPO) in Shanghai and Hong Kong was abruptly canceled by regulators in November 2020.

Chinese President Xi Jinping delivers a keynote speech in virtual format for the opening ceremony of the BRICS Business Forum on June 22, 2022. Photo: TUSEN alt=Chinese President Xi Jinping delivers a keynote speech in virtual format for the opening ceremony of the BRICS Business Forum on June 22, 2022. Photo: TUSEN>

China’s digital payments and fintech platforms should help “ensure the security” of their industry’s infrastructure and “prevent systemic financial risks”, according to the commission statement. These platforms are also encouraged to “play a greater role” in supporting the economy and supporting China’s dual circulation economic goal, which is spelled out in the 14th Five-Year Plan for 2021-25 and the Vision strategy. 2035 of the country.

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The latest initiative of the commission, which was formed in 2013 under the political bureau of the ruling Chinese Communist Party, reflects Beijing’s commitment this year to supporting the “healthy development” of the online service industry, as the The country’s economy is reeling from the disproportionate impact of regulatory crackdowns and zero-Covid-19 checks.

The easing of regulatory scrutiny, however, has stoked speculation that Ant, a subsidiary of Alibaba Group Holding, may be set to relaunch its IPO. Alibaba owns South China Morning Post.

Ant earlier this month denied he was working on a new plan to go public. The China Securities Regulatory Commission also said it was not making any assessment regarding the potential resumption of the company’s IPO.

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There has also been speculation over whether Ant will seek a financial holding license from the country’s central bank, the People’s Bank of China. Ant declined to comment on Thursday.

Shares of Alibaba in Hong Kong, meanwhile, closed down 6.4% on Thursday at HK$108.

China’s economy showed the first signs of recovery in May, before an expected rebound in the second half of this year, helped by a series of government stimulus measures.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice journal on China and Asia for over a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

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