China's regulators summon 13 internet firms engaging in financial business
Updated 23:30, 29-Apr-2021
China unveiled antitrust guidelines for the platform economy on February 7, 2021. /CFP

China unveiled antitrust guidelines for the platform economy on February 7, 2021. /CFP

Chinese financial regulators on Thursday summoned 13 internet companies engaging in financial business, in efforts to strengthen anti-trust, prevent disorderly expansion of capital and promote healthy development of the platform economy.

This is the latest move since China took serious actions against monopolistic practices, especially of internet companies, last year. The authorities were led by the People's Bank of China, China Banking Regulatory Commission, China Securities Regulatory Commission, and State Administration of Foreign Exchange. 

The 13 companies summoned include Tencent, ByteDance and Lufax, as well as Duxiaoman Finance, JD Finance, and Didi Finance, which are financial arms of search engine firm Baidu, e-commerce platform and ride-hailing platform Didi Chuxing. 

The authorities affirmed the role that online platform companies have played in recent years in improving the efficiency of financial services, the inclusiveness of the financial system, and reducing transaction costs. 

They pointed out, however, that there are also unlicensed or over-licensed financial services in these firms' operations, illustrating serious violations such as imperfect corporate governance mechanisms, regulatory arbitrage, unfair competition, and damage to the legitimate rights and interests of consumers. 

The regulators said the companies have a large business scale and important influence in the industry, and have exposed typical problems that must be corrected, bringing up seven rectification requirements for them.

Among them, the regulators stressed that all financial activities must be included in supervision, and all financial business must be licensed. Meanwhile, they reiterated the requirement for the firms to return origin of payment by disconnecting improper connections between payment instruments and other financial products, and ordered the firms to strictly control the expansion of non-bank payment accounts to the public domain, improve transaction transparency, and correct unfair competition.

The companies participating in the meeting expressed that they will attach great importance to self-examination and rectification work, and formulate rectification plans under the guidance of financial management departments.

The firms said they will further enhance their social responsibility when providing services, and maintain a fair competitive market environment, meanwhile making every effort to ensure financial compliance.

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