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China unveils guidelines on Internet finance

China has rolled out a raft of policies and measures to support innovation and minimize risk to ensure healthy development of Internet finance.

To promote the sound and steady progress of the emerging industry, the country will regulate market order and further clear regulatory responsibilities, according to the guidelines jointly released on Saturday by ten central government ministries and industry regulators, including the People's Bank of China (PBOC), the Ministry of Industry and Information Technology, the Ministry of Finance and China Securities Regulatory Commission.

Internet finance refers to loans, investments and other financial services provided through online channels rather than through banks and other financial institutions.

"Development of Internet finance provides a golden opportunity for mass innovation and entrepreneurship," according to an official with the PBOC during a press conference, adding it can help standardize non-governmental finance and open up the financial industry.

As a new sector, Internet finance requires encouragement to bring out new ideas and policy support to ensure healthy development, the PBOC said.

The guidelines highlight overall requirements for authorities in supporting Internet finance. They have been reviewed and approved by the State Council, China's cabinet.

Governments at all levels should actively encourage innovation in e-finance platforms, products and services, according to the guidelines, and cooperation between financial actors in the industry should be protected and encouraged.

"Internet finance could help small and micro enterprises with investment and fund raising, and also upgrade the quality and efficiency of financial services," said the official.

Governments should help expand access to capital for market players, the guidelines said.

The guidelines also urged government red tape to be cut and related fiscal and taxation policies to be improved to ward off potential risks for the industry's development.

The guidelines said that support services and infrastructure for the industry should be improved. Market players are encouraged to build a credit information sharing platform. Qualified credit intermediary agents will be supported in rating the credit of online finance companies to enhance information transparency.

The guidelines insisted on a market-oriented mindset in developing Internet finance and aim to serve the real economy and maintain financial stability, while abiding by the central government's macro-control policies.

It urged protection of consumers' legitimate rights and information security. Regulations should be rolled out to deal with criminal activities related to Internet finance.

Industry self-discipline is also required to build a sound and honest environment for Internet finance players.

China unveiled an "Internet Plus" action plan on July 4 to integrate the Internet with sectors such as modern manufacturing, agriculture, energy, finance, public services, logistics, traffic and e-commerce, showing the government's efforts to explore ways the Internet can bolster the economy and employment.

[Source: Xinhua, Beijing, 18Jul15]

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