China plans to push tech giants, including Ant Group Co (螞蟻金服), Tencent Holdings Ltd (騰訊) and JD.com Inc (京東), to share consumer loan data to prevent excess borrowing and fraud, two people with knowledge of the matter said, in Beijing’s latest tightening of scrutiny.
The plan, if implemented, would effectively end the government’s laissez-faire approach to the industry. Large Internet platforms have tended to resist handing over their data, a crucial asset that helps them run operations, manage risk and lure new customers.
Chinese regulators, including the central bank, plan to instruct Internet platforms to feed their vast loan data to some of the nationwide credit agencies, the people said.
Photo: EPA-EFE
The agencies, which are run or backed by the People’s Bank of China (PBOC), would share the data more widely with banks and other lenders to adequately evaluate risks and prevent overborrowing, the people said.
Ant and Tencent declined to comment.
JD.com and the PBOC did not immediately respond to requests for comment.
The people declined to be identified, as they were not authorized to speak to the media.
Details of the regulatory proposal to include Tencent and JD.com in the loan data sharing arrangement have not been reported.
The plan adds to recent proposals to sharpen scrutiny of the technology champions and rein in empire-building, mainly in the financial sector; the shift helped bring about the dramatic collapse of fintech giant Ant’s US$37 billion initial public offering (IPO) in November.
Since then, the regulators have launched an antitrust probe into Ant’s former parent, Alibaba Group Holding Ltd (阿里巴巴), and ordered the fintech company to shake up its lending and other consumer finance businesses.
The latest regulatory proposal for Internet companies also comes as Beijing grows wary of loose risk controls at banks, mainly smaller ones, in terms of consumer loans and their excessive reliance on platforms such as Ant to find customers.
“Smaller banks are generally in a weaker position when they partner with fintech giants like Ant. They have heavily relied on Ant’s data to underwrite loans and manage risks,” one senior regulator said.
“When defaults happen, they have to shoulder most of the losses,” said the regulator, who declined to be named because of the sensitivity of the matter. “It’s crucial for lenders to have better access to more comprehensive and detailed credit data on borrowers.”
The latest regulatory attempt would likely dampen the scale and profitability of tech majors’ credit businesses. That area is a cash cow, as the companies levy high service fees on banks in exchange for access to millions of customers using propriety data.
Via its Alipay (支付寶), Ant collects the data of more than 1 billion people, many of whom are young and Internet-savvy users without credit cards or sufficient credit records with banks, as well as 80 million merchants, according to the company’s prospectus and analysts.
Ant runs Sesame Credit (芝麻信用), one of China’s biggest private credit-rating platforms, with proprietary algorithms and methodology that score people and small businesses based on their use of Ant-linked services.
The firm offers limited borrower information to about 100 banks, and takes the so-called “technology service fees” — a 30 to 40 percent cut, on average, of the interest on loans it facilitates, analysts estimated.
Ant’s consumer lending balance stood at 1.7 trillion yuan (US$263 billion at the current exchange rate) as of the end of June last year, accounting for 21 percent of all short-term consumer loans issued by Chinese deposit-taking financial institutions, according to its IPO prospectus and PBOC data.
Compared with Ant, rivals Tencent and JD.com run relatively smaller consumer-credit business.
Tencent’s private lender, WeBank (微眾銀行), has operated micro-loans unit Weilidai (微粒貸) since 2015, which made more than 460 million loan drawdowns worth more than 3.7 trillion yuan as of the end of 2019, according to WeBank’s annual report.
JD.com’s fintech arm, JD Digits (京東數科), operates two platforms — Baitiao (白條) and Jintiao (金條) — which had a combined 70 million annual active users and took in a total of 4.4 billion yuan in technology service fees during the first half of last year.
Jintiao facilitated consumer loans worth 261 billion yuan in the same period of last year, JD Digits’ prospectus showed.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last