Following the interview with Ant Group, four financial regulators, including the People’s Bank of China, the Banking and Insurance Regulatory Commission, the Securities Regulatory Commission and the Foreign Exchange Bureau, interviewed the actual controllers of 13 leading network platform companies, including Tencent and Meituan Finance, in an official release this Thursday (29th).
Xinhua News Agency reported that on April 29, four financial regulators, including the Central Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission and the Foreign Exchange Bureau, jointly conducted regulatory interviews with some online platform companies engaged in financial business. Pan Gongsheng, deputy governor of the Central Bank of China, presided over the interview meeting. Among those interviewed were the actual controllers or representatives of 13 online platform enterprises, including Tencent, Du Xiaoman Finance, Jingdong Finance, Byte Jump, Meituan Finance, Drip Finance, Lufax, Tianxing Digital, 360 Digital, Sina Finance, Suning Finance, Gome Finance, and Ctrip Finance.
In an interview with Radio Free Asia, Financial Scholar Commander said that those interviewed by officials are private financial enterprises that stray from traditional bank credit financing.
“They have bypassed China’s banking system to serve small and medium-sized customers, and even many individual households have financed the funds they need for their operations from these channels. So the crowding-out effect of these Internet finance giants on the traditional financing channels of the banking industry as they blossom all over China really cannot be ignored.”
According to mainland official media reports, the 13 platform companies interviewed this time all have the characteristics of integrated operations, large volume and scale, and strong industry influence, and this time, like the interview with Ant Group two weeks ago, the authorities hope to send a warning to these companies through the conversation.
Lu Zhenning, a sociologist at Zhejiang University, told the station that the authorities’ high-profile interviews with the head platform companies show that they already have a complete set of rectification plans, and that their intention is to prepare for the nationalization of large private enterprises.
“In the economic field the trend of nationalization is more obvious and is accelerating. As an Internet company, which is also a more active sector of the economy, the Beijing government will certainly spare no effort to control it and restrict it. The next step is likely to be their nationalization. More equity participation, or even a controlling stake, by state-owned capital.”
Financial giants are very influential in the online world
Some scholars believe that both the rectification program already in place for Ant Group and this interview with 13 network platform companies reflect the authorities’ preparations for the program that will be implemented next.
Scholar Lu Zhenning analyzed that another reason for official interviews with leading Internet companies is related to strict monitoring. He said.
“Because the Internet he for freedom of speech, for civil communication and interaction is a more favorable economic form, but also a form of communication, self-media form, such as Taobao, WeChat, QQ, etc., these platforms are not just trading and consumption platform, it unites a large number of users.”
According to official statistics, China’s WeChat users have exceeded 1.2 billion, Taobao more than 800 million and QQ close to 600 million. According to sociologist Lu Zhenning, the authorities are most worried about these netizens, because once the consequences are unpredictable for a particular sudden event, cascading on the Internet.
“The Communist Party is of course very nervous and very wary of such a platform and force that can connect and even unite the people. So they [the authorities] have to be more comprehensive and thorough in their control.”
The government fears the development and growth of the private economy
According to the academic commander, the authorities’ rectification of private Internet companies will not only cut off the flow of funds in favor of state-owned banks, but also control private opinion as well as restrict the development of the private economy, which can be considered a multi-benefit.
“The government still seems to really fear the development and growth of the private economy, because the development and growth of the private economy depends on his ability to get strong support from the capital market as well as the support of the system, but unfortunately now for Ant Financial Services, Tencent, Alibaba comprehensive suppression, marking the continued dominance of the state-owned economy. The survival space of the private economy is further compressed.”
After the authorities issued an antitrust fine of more than 18 billion to Alibaba not long ago, they then asked 34 platform companies, including Tencent, Jingdong, Byte Jump, Baidu and Meituan, to “rectify” the situation by a deadline.
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