In a four-year campaign to root out risks to China’s financial system, regulators have set upon their biggest target yet: the world’s largest financial technology sector.
All three financial watchdogs have made it their primary goal this year to curb the "reckless” push of technology firms into finance, taking aim at a sector where loose oversight fueled breakneck growth for companies such as Ant Group Co. and Tencent Holdings Ltd.’s Wechat Pay. They have the green-light from President Xi Jinping, who in November called on regulators to "dare to” master their supervisory role.
The coordinated onslaught guarantees a shakeup among the country’s more than 7,000 microlenders. But regulators have made it clear they intend to stretch well beyond, into every corner of internet finance from payments to credit scoring, wealth management to partnerships with banks and more. Fintech is the latest sector marked for an overhaul since 2017, when China’s leaders pledged to clean up threats to its $53 trillion financial industry, tackling property loans, opaque wealth management products and fraud-riddled peer-to-peer lending.