Bloomberg:
There is a question regarding fintech that I would like to ask Mr. Guo. What role should Ant Group's fintech company have in the domestic financial market? Are there any businesses that are not suitable for them? Thank you.
Guo Shuqing:
Thank you for the questions. Both domestic and foreign media are very concerned about the issue and have published quite a few reports. I believe you are well-informed about the situation. Four financial authorities (the People's Bank of China (PBOC), the CBIRC, the China Securities Regulatory Commission (CSRC), and the State Administration of Foreign Exchange (SAFE)) have carried out regulatory talks with Ant Group's top executives, and released update of their discussions in a timely manner. Pan Gongsheng, deputy head of the PBOC, has also made remarks on the issue.
China takes leads the world in online platforms' provision of financial services, in terms of both scale and scope. Much positive progress has been made, especially in digital credit and digital insurance to micro, small and medium-sized enterprises, among other services. Many innovations have been rolled out, and we encourage innovation.
But at the same time, we require that all forms of financial services, without exception, should be regulated in accordance with the relevant laws, rules, and regulations. For example, CBIRC recently released a notice on regulating commercial banks' internet loan businesses. According to the notice, when commercial banks jointly contribute funds to issue internet loans with a partner, the proportion of capital from the partner in a loan should not be less than 30%. It also set out requirements on the proportion of the balance of internet loans from a bank to its net worth. A one-year grace period was given to ensure steady implementation of the requirements.
We also encourage the development of private online banks, such as MYbank under Ant Financial Services Group, WeBank under Tencent, and another one based in Sichuan province. But the operation of these banks must be regulated in accordance with financial rules. We don't think of these as constraints on their business. But all their businesses, such as insurance, trust, leasing and other financial services, should comply with the rules of the financial sector. I believe those institutions will meet the requirements and achieve more healthy development. Thank you.
