China to focus on online finance companies to further strengthen regulations over internet firms

China’s central bank plans to include large systemically important internet finance firms in its Macro Prudential Assessment (MPA), the official Xinhua news agency reported on Saturday.

Representational image. AP

Representational image. AP

The MPA risk assessment framework already includes checks of loans, bond investments, equity investments, and buy-backs of financial assets sold, and deposits at non-financial institutions. China will explore different methods of covering internet finance firm risk, Xinhuareported the People’s Bank of China (PBOC) as saying in a Friday report.

The PBOC will improve its supervision and strengthen regulation over internet firms, allow industry and local associations to play a bigger role and promote new technology, Xinhua said. Development of internet finance has made finance more accessible, improved financial service efficiency, given Chinese more investment options, and helped some small businesses get badly needed loans, the agency added.

Internet finance covers not just P2P lending, but also third-party online payments, crowd funding and other financial services, which has led to growing risks, Xinhua said.

Last year, China was  consolidating its ability to censor the Internet by drafting new rules requiring businesses that serve domestic Internet users to register their Web addresses inside the country, a move seen as targeting Chinese companies but that has raised concerns among foreign businesses.