Supervision set to guide platforms

Experts: New steps will boost tech, corporate governance, sustainability

China's supervision of platform companies' financial activities will normalize with more targeted efforts to guide them toward better compliance, promote the healthy development of the sector and better serve the real economy, experts said.

Their assessment emerged after Guo Shuqing, Party secretary of the People's Bank of China, the country's central bank, said the special rectification work on 14 platform companies' financial businesses has "basically completed", and there are only a few residual issues to sort out.

Supervision will be regular henceforth and support will be extended to help platforms play a bigger role in bolstering economic growth, job creation and global competition, Guo said in an interview with Xinhua News Agency on Saturday.

Chinese tech heavyweight Alibaba's financial arm Ant Group said on the same day that no shareholder, alone or jointly with other parties, will have control over the company, as part of its broader push to further optimize corporate governance.

The move means Alibaba's founder Jack Ma will no longer control the Chinese financial technology company after a series of adjustments changed on how voting rights would be exercised by Ant's major shareholders.

Ant said it will continue to serve the real economy by leveraging digital technology, implementing sustainable development strategy, optimizing corporate governance, investing in cutting-edge technologies, and creating greater value for society.

The Hangzhou municipal government signed a strategic cooperation agreement with Alibaba on Tuesday. The two parties will strengthen collaboration to bolster the development of the digital economy and "intelligent" industries, as well as achieve common prosperity.

Shen Yan, deputy head of the Institute of Digital Finance at Peking University, said the normalized supervision will replace intensive and special rectifications of improper behaviors in platform companies, and the regulatory environment will become more stable.

The recent policy developments are conducive to "stabilizing market expectations and enabling the financial sector to further serve the real economy, thus promoting the high-quality development of the digital economy", Shen said.

Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School, said, "The latest moves have sent a strong signal that China will encourage the standardized and healthy development of platform enterprises."

The two-year rectification work of platform economy is nearing an end, while more concrete measures will be taken to achieve regular supervision, he said.

On the changes to Ant's shareholder voting rights, Pan said optimization of the corporate governance structure will ensure stable operations at platform enterprises, and benefit their long-term, sustainable development. Ant, he said, may well seek an IPO in the future.

Since late 2020, Chinese regulators have been ramping up supervision of platform enterprises' financial businesses. In December 2020, financial authorities, including the central bank and the banking and securities watchdogs, asked Ant to rectify its business and comply with regulatory requirements.

In April 2021, authorities concerned summoned 13 internet-based platforms engaged in finance, including Tencent, JD Finance, ByteDance and 360 DigiTech, and ordered them to strengthen compliance with regulations.

Ant undertook business rectification and set up a consumer finance company in Chongqing in June 2021. Chinese regulators have recently approved Ant's plan to raise 10.5 billion yuan ($1.5 billion) for its consumer finance unit, marking a key step forward for the revamp of Ant's lucrative consumer loan business.

In November, 360 DigiTech, a Chinese mainland internet-based finance firm, completed a secondary listing on the Hong Kong bourse. The company said the consumption sector will witness a strong rebound, and the company will offer favorable credit services to consumers and enterprises in the industrial chain to bolster the recovery of consumption and serve the real economy.

Ouyang Rihui, assistant dean of the China Center for Internet Economy Research at the Central University of Finance and Economics, said platform enterprises should collect and utilize data resources in accordance with the laws and regulations, and attach great importance to protecting data security. He also highlighted the need to make full use of data elements to facilitate the development of the digital economy.

China has rolled out 20 key measures to help build basic systems for data and put data resources to better use. The larger goal is to activate the value of data elements, and inject fresh impetus into economic growth, experts said.

Ouyang Shijia contributed to this story.