Chinese Internet finance to lead the world

On Feb 10, 2015, the social science hall of the Chinese Academy of Social Sciences hosted the grand opening of the "Chinese Internet financial regulation policy and credit construction symposium".

The symposium followed the principle of "thought emancipation and a hundred schools of thought contend". Participants conducted discussions aimed at facilitating the sound development of the Internet finance industry and making it provide more standard services for medium, small and micro-sized enterprises and "agriculture, rural areas and farmers". They put forward many innovative ideas for how Chinese Internet finance can best serve Chinese economic development under the new normal.

The development speed of Chinese Internet finance attracted much attention in 2014. By the end of December, the accumulative business volume for the year surpassed 300 billion yuan ($47.82 billion), about 390,000 people were employed in the peer-to-peer network loan industry, more than 2 million enterprises had been served, and about 60 million employees in relevant industries have been involved. These data show the prosperous development of Chinese Internet finance. Yuan Shanxiang, deputy director of the Foreign Trade International Finance Research Center of the Chinese Academy of Social Sciences and the secretary general of the Chinese Internet Finance Honesty League, said: "Internet finance brought in China has achieved rapid development through constant improvement and innovation. The future global Internet finance rules will be made by China and China will definitely lead the trend of world Internet finance."

Yuan said that, on March 5, 2014, the heads of state put forward "promoting Internet finance sound development" in the second conference of 12th National People's Congress. This proved Internet finance has been formally acknowledged at the Chinese decision-making level, and has become a new financial element of Chinese economic development.

Internet finance has become a new topic of the times in the Chinese financial industry. The 18th CPC National Congress set very clear expectations and goals for Chinese economic reform. Chinese Internet finance gives full play to mechanism innovation and technological innovation, uses private capital to effectively support small enterprises, stimulates vigor in the Chinese economic development process and integrates Internet finance into economic entities. Practice has proved that it has become difficult to meet the demands of the real economy merely by depending on traditional financing institutions. However, the speed, transparency and low cost of Internet finance are much better than those of traditional financial service modes. In the Chinese economic transition process, Internet finance will play a vital role as an effective supplement to traditional financing.

Yuan's new book, which translates loosely as The Common Man Plays Internet Finance Well, has summarized Chinese Internet finance characteristics, such as its grassroots nature and inclusiveness. In particular, it is of great significance for the persistent ailment of medium, small and micro-sized enterprises financing difficulties, which the Chinese government has strived to solve for the past 20 years. Yuan said: "Chinese Internet finance has experienced its primary development stage in China and has vital practical significance in current economic development and social transition. Chinese Internet finance is also in accordance with the developing direction of 'improving inclusive finance' put forward at the 18th CPC National Congress and the 3rd Plenary Session of the 18th Central Committee of the Communist Party of China. However, a perfect credit system and self-discipline mechanism should be built. Only by taking honesty as its basis can Chinese Internet finance truly and effectively facilitate Chinese economic development."

As seen by its achievements in 2014, the Chinese Internet finance industry of the future is expected to quicken its pace with an innovative attitude and by realizing integration and interaction with traditional financial institutions. As a new-type industry, Internet finance has effectively promoted macroeconomic growth by way of improving capital market competition and capital allocation efficiency, and lowering credit capital cost. A new Internet finance ecological system has formed, and the moment when the Chinese Internet finance industry leads global Internet finance has come.