Risks in China's digital service industry yet to be tackled in rural areas

Updated 2016-11-28 12:40:07 chinadaily.com.cn

Senior central bank officials called for the establishment of legal framework to fend off risks caused by digital financial services in order to better achieve inclusive growth nationally.

Speaking at the China Financial Forum in Hangzhou, Zhejiang province, on Saturday, Xu Zhong, head of the research bureau with People's Bank of China, said that fast development of digital finance in recent years in China helped improve financial inclusion — the delivery of financial services at affordable prices.

"Digital technologies helped resolve a number of difficulties in distanced places with no basic infrastructure hindering financial inclusion, through mobile payments, online banking and online crowdfunding services," said Xu. "For people in need of loans in distanced regions, they could easily complete a transaction as long as they have access to mobile phone services."

But regulators have yet to appropriately account for risks related to the emerging digital service industry, according to Xu, referring to credit risks, fraud, fund flight and illegal fundraising activities.

The Annual Report of Internet Finance in China released earlier this month showed that by the end of last year, 1,171 private lending platforms were shut down due to runaway managers and withdrawal difficulties—almost double from the previous year.

"These problems might be harder to deal with considering weak credit system in rural areas," said Xu.

Echoing his remarks, Huang Yiping, a central bank advisor, said that regulatory bodies need to address new risks emerging from digital finance, because risks would spread to other economic arenas.

Given the size and geographical dispersal of China, online microcredit companies can be supervised by local financial regulatory bodies under a unified nationwide legal scheme, according to Huang.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58May 23 2017 22:37:31

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16May 23 2017 22:37:31

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18May 23 2017 22:37:31

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

Most Watched

News:
China World Business Sports Showbiz Audio
Video:
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
Photos:
China World Fun Travel Entertainment Sports
Travel:
Beijing Shanghai Guangzhou
Lifestyle:
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords