Guangzhou to host fintech projects in government sandbox in race with Beijing, Shanghai
- Guangzhou joins major cities in China, including Beijing and Shanghai, in pushing the regulated development of fintech
- Early fintech projects in China, such as peer-to-peer lending and crypto exchanges, were rooted out by authorities
The southern Chinese city of Guangzhou has joined Beijing, Shanghai and Shenzhen in boosting local fintech innovations by introducing a sandbox programme that allows stock exchanges, as well as securities and futures companies to experiment with new technology initiatives, according to a plan unveiled by local authorities this week.
The plan is aimed at building a “prudent and tolerant” regulatory environment, and facilitating the “digitisation of the capital market”, according to a notice published by the Guangzhou Municipal Local Financial Supervision and Administration. The project has received the blessing of the China Securities Regulatory Commission (CSRC), officials said.
Guangzhou’s move is part of a rising trend in China that has seen local governments and licensed financial institutions pushing the use of fintech, after Beijing rooted out businesses that it deemed harmful, such as peer-to-peer lending and crypto exchanges.
According to the Guangzhou notice, local bourses, broker-dealers, fund management companies, and other CSRC-approved companies can apply to join the programme. Participants are encouraged to use big data, cloud computing, artificial intelligence, blockchain, and other technologies to empower their financial products and services, according to the announcement.
During the pilot period, participants that ran into information security issues may be exempted from punishments if they did not cause severe losses to investors or significantly affect the market order, the regulator said.
The fintech sector, which came under strict scrutiny after the abrupt halt of Ant Group’s mega IPO in late 2020, has been repeatedly targeted by regulators amid a crackdown on the wider tech industry.
Ant went through several restructures to address the risks it might pose to China’s finance sector. It was also told to spin off its microcredit and consumer credit services. Ant is an affiliate of Alibaba Group Holding, owner of the South China Morning Post.