Greater Bay needs regulatory ‘sandbox’ for fintechs, urges China’s former top banking regulator

Liu Mingkang, a former chairman of China’s banking regulator, is urging the setting up of a dedicated so called regulatory “sandbox” for the ever-growing Greater Bay Area – the Pearl River Delta region linking 11 cities in southern Guangdong province, including Hong Kong and Macau.

Regulatory sandboxes are effectively “safe, supervised spaces” in which new businesses can pilot innovative products, services, business models and delivery mechanisms without immediately incurring any regulatory consequences.

They can help firms reduce their time-to-market at potentially lower costs, protected with appropriate consumer safeguards built into new products and services, and be offering better access to finance.

Speaking at the Everbright Investment Conference in Hong Kong on Thursday, Liu said: “The development of the Greater Bay Area is important because it will be used by the whole nation to gain better experience of the continuous opening-up reforms.

“We want to see how the Greater Bay Area applies certain requirements and fundamentals using a market-oriented approach under regulations which will produce success for some companies, and inevitably mean failures for others,” said Liu, who chaired the China Banking Regulatory Commission (CBRC) from its creation in 2003 until he retired in 2011.