Chinese officials may limit the number of financial institutions to which any single FinTech platform may connect, Reuters reported, citing coverage by state media.
The suggestion was made by Lou Jiwei, the country’s former finance minister and now an advisor to the government, Reuters reported. Jiwei was speaking at a wealth management conference.
One reason Jiwei gave for the possible rule is that it would help avoid the amassing of too much bad debt by one entity. A cap also would support competition, he said, according to Reuters.
“We can limit the number of banks that any single platform can work with, so as to let more platforms do similar businesses under the same conditions,” he said, Reuters reported.
Jiwei also said FinTech companies should not be allowed to become so dominant that they consume nearly all the business in a sector or are “too big to fail,” according to Reuters.
Jiwei’s remarks come against a backdrop of the government’s cancellation this fall of what was expected to be a record-setting initial public offering (IPO) by Jack Ma’s Ant Group.
Chinese officials have warned in recent months that the tech sector faces significant new regulation, lest companies operating within it become too powerful.
Reuters reported that Chinese officials last week invoked a pro-competition law for the first time since its 2008 inception to levy fines against companies such as Ma’s Alibaba Group.
Ma reportedly ran afoul of government officials in October when during a speech he questioned whether the government was stifling innovation. It was soon after that the government blocked the Ant Group IPO.
Jiwei was seen as a reformer when he left his post as finance minister, the BBC reported at the time.
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