China aims for better finance environment through regulation, innovation

File photo shows the morning view of the Lujiazui area in Pudong, east China's Shanghai. (Xinhua/Ren Long)

BEIJING, Oct. 20 (Xinhua) -- China strives to create a better finance environment through strengthened laws, regulations, and innovation, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, told Xinhua in an interview.

As the world's second-largest modern financial system, China's financial system has strong vitality with its openness, competitiveness, fairness, and inclusiveness at a high level, said Guo, also Party secretary of the People's Bank of China, the central bank.

In terms of competitiveness, he said, there are more than 4,000 institutions in China's banking system. The market share of the four major state banks is only about 34 percent, with the industry concentration far lower than that of developed countries.

In addition, China's mobile payment, online credit, and internet insurance businesses are booming, and these fields are dominated by private capital, he said.

"Without the support of financial institutions and policies, it is difficult to have such a situation," Guo added.

On the other hand, Guo admitted that "monopolies and unfair competition are prominent problems in certain areas of China's financial sector."

He cited the disorderly expansion of industrial capital in the finance field, illegal financial activities disguised as "financial innovation," and unfair competition of some large internet platforms in various financial services as major problems in the sector.

Therefore, anti-monopoly and preventive measures against disorderly capital expansion are urgently needed and conducive to fostering a new development paradigm, advancing high-quality development, and promoting common prosperity, Guo said.

China has taken a slew of measures to combat monopolies, including strengthened supervision over behaviors of major shareholders of banking, insurance, and securities institutions and their equity management, and the 2020-2022 action plan for the corporate-governance reform of state-owned enterprises.

Guo stressed that Chinese authorities place equal emphasis on strengthened regulations and innovation, noting that financial innovation is encouraged on the premise of "people first."

He pledged further measures to create a better finance environment for the private economy, such as encouraging banks to accelerate their digital transformation and providing private businesses with more convenient financial services.