China’s central bank governor Yi Gang lauded the superior services of digital lenders, urging traditional banks to take this as a hint to improve.
According to Yi, digital lenders have excelled at acquiring more information about clients, the usage of big data and the management of non-performing loans.
«[T]hey make better services,» Yi said, according to a «Caixin» report. «That’s also a hint to commercial banks to improve their services.»
In other digital matters, Yi also noted China’s planned digital currency electronic payment (DCEP) program «made very good progress» but stressed that risk controls such as anti-money laundering and KYC requirements still need to be studied. The central bank had reportedly begun limited electronic payment trialing last month, reportedly for potential real usage in the Tokyo Olympics.
Digital Tailwinds in a Pandemic
Future outlook aside, Yi noted that digital developments have already paid dividends during the economically crippling coronavirus pandemic which led the second-largest economy to post its first-ever GDP contraction on record. Digital commerce, digital orders and delivery were cited as critical contributors in the past three months.
«So that is, I think, one reason that during the pandemic, basic services like everyday life supplies and necessities, commodities in China have been in relatively abundant supply with orderly shipping to consumers,» Yi said. «Even in the worst place, Wuhan, they can still have groceries and other supplies delivered to their households.»
SME Support
Yi also reiterated the central bank’s commitment to provide financial support in the face of economic difficulty fuelled by the pandemic. He highlighted small and medium-sized enterprises and the implementation of a loan rollover program for the segment.
«And the purpose of doing that is to try to minimize layoffs,» he said. «We know that it’s small and medium enterprises who create most of the employment, so I think that strategy has paid off.»
Anti-Globalization
Finally, Yi noted the pushback against globalization and the growing right-wing sentiments in the international community despite China’s ambition for yuan liberalization, the opening of its domestic markets and general cooperation in matters such as fintech or central bank digital currencies.
«We still think that opening-up and globalization help increase productivity and help lifting people from poverty, and the general direction is correct,» he added.
