China might limit financial institution tie-ups with fintech platforms, official suggests By Reuters

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© Reuters. FILE PHOTO: Chinese national flag flutters near the China Securities Regulatory Commission (CSRC) building on Financial Street in Beijing

BEIJING (Reuters) – China’s former Treasury Secretary Lou Jiwei suggested that China could limit the number of banks a single fintech platform could work with to prevent one platform from gaining too much market share, state media reported on Sunday.

China’s regulators last month warned the country’s tech giants that they would be scrutinized. A planned $ 37 billion listing Alibaba The NYSE’s Ant Group :), which is slated to be the largest in the world, was abruptly suspended.

Lou, who continues to hold influence as director of foreign affairs on a top advisory body to the Chinese government, warned at an asset management forum on Saturday that a fintech platform with an oversized market share could lead to bad debts, according to the Securities Times.

“We can limit the number of banks a single platform can work with so more platforms can do similar business under the same conditions,” he said, adding that fintech platforms are not allowed to grow to the “winner” needs all “and” too big to fail “.

China has vowed to strengthen supervision of its major technology firms, including Alibaba Group Holding and Tencent Holdings (OTC :), some of the largest and most valuable in the world. Many of these companies have collected large amounts of user data in the process of providing their services.

A security guard said Beijing should consider imposing a digital tax on technology companies that have extensive user data, state media said last week.

Regulators last week fined tech firms like Alibaba for failing to properly report past deals for antitrust reviews. This is the first time an internet company has been fined for violating a 2008 antimonopoly law.

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