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Probe not of one firm, but whole sector: China Daily editorial | Updated: 2020-12-30 21:49
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Internet finance's contributions to socioeconomic development, and the efficiency and inclusiveness of financial services are undeniable. But that does not mean it is free of problems.

With the utilization of advanced technology, big data and abundant capital, internet finance has developed at fast speed in China, posing huge challenges to financial supervision.

For instance, people's personal information is leaked; dealings and funds are shielded from financial watchdogs and clearing departments; and the scale and technological strengths of enterprises are leveraged to exclude competitors.

Any of these challenges, if unchecked, might snowball into multiple crises.

So supervisory moves targeting this critical niche market became imperative, as many applications of internet finance have the potential to turn sour and create risks for the wider economy.

So it is no surprise that with the authorities acting to better regulate the development of the industry, so as to give full play to its good points and avoid its shortcomings, Ant Group, the industry leader, should be the first to come under scrutiny.

That the antitrust investigation into Ant Group involves the central bank and the market, banking, securities, insurance and foreign exchange administrations lays bare the extent to which the e-commerce giant has extended its reach into the financial sector.

But the ongoing probe has provided sufficient signs that what the administrative departments are trying to do is by no means to regulate one company but rather the whole internet financial sector, as Pan Gongsheng, vice-president of China's central bank, told the media on Sunday.

The company has been ordered to "strictly rectify" its lending, insurance and wealth management services after a multitude of problems were identified, such as flaws in its corporate governance, poor legal awareness, a lack of regulatory compliance and abuse of its market dominance.

There is no doubt that China needs a booming internet financial industry. But the magnitude of the antitrust investigation signals the State is intent on strengthening its supervision to prevent illegal financial activities, curb unfair competition and nip risks in the bud.

The new rules, which look set to replace the current comparatively simple licensing system, will recalibrate the relations between traditional financial agencies and internet financial companies, and help the country cross the river by feeling stones, improving the country's right to have a bigger say in the drafting of the rules for the global internet financial sector in the future.

As such, there is no reason why Ant Group and other giants on the antitrust radar of the authorities should not cooperate with the ongoing and future probes, as they are good for the healthy development of the industry and thus their future development.

Given their deep penetration into the national economy and society, the internet financial companies must raise their awareness of their responsibilities. They are obliged to behave themselves bearing the interests of the country and people in mind.

The probes are not a means to settle accounts, but a means to help the enterprises as well as the whole industry to outline a road map into the future.

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