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Regulation and Supervision of Internet Finance and Consumer Protection in China

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Consumer Law and Socioeconomic Development

Abstract

Recent years, Internet finance in China witnessed a rapid development in a way that financial services constantly innovate by the support of information and communication technology. This pattern includes not only the innovation of the convenience of financial services, thanks to the Internet and trading terminal or other technological progress, such as online sale of monetary funds, and also the change of trading channels like equity crowdfunding. In 2015, 10 ministries, including People’s Bank of China (referred to as PBOC hereafter), promulgated the Guiding Opinions for Promoting Healthy Development of Internet Finance (2015), in which six legitimate Internet finance patterns are prescribed: online payment, online loan, equity crowdfunding, online sale of monetary funds, online insurance, online trust, and consumption finance.

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Notes

  1. 1.

    According to Guiding Opinions for Promoting Healthy Development of Internet Finance, Article 7 to Article 12 in Part 2: Online payment is a service to launch payment orders and transfer monetary funds by computers, mobile phones or other apparatuses on the Internet; Online loan includes personal online loan (that is P2P online loan) and online small loan. P2P is the direct loan between individuals on the Internet platforms. Personal online loan institutions should insist the function of platforms and clarify its nature of information intermediaries. These institutions mainly provide information services for direct loan between lenders and borrowers and are prohibited to provide assurance services and illegally absorb funds. Online small loan is that small-loan companies controlled by Internet companies offer small loan to clients by using the Internet. Equity crowdfunding financing mainly refers to public small equity crowdfunding on the Internet, which is completed on the Equity crowdfunding financing intermediaries’ platforms (Internet websites or similar electronic medias; Online sale of funds refers to funds sale institutions cooperate with third-party payment institutions to sell funds or other financial products; Online insurance refers to insurance companies operate online insurance business; Online trust and online consumption finance refer to trust companies and consumption finance companies operate online businesses.

  2. 2.

    Reference to Internet financial institutions’ websites for products promotion, such as http://8.wacai.com/detail/10070775-0.htm etc.

  3. 3.

    Butani (2012). http://www.fonearena.com/blog/59613/mobile-subscriber-base-in-chinacrosses-1-104-billion-with-revenues-over-116-26-billion-in-2012.html; Ericsson. 2013.“Ericsson Mobility Report.” Ericsson, August. http://www.ericsson.com/res/docs/2013/emr-august-2013.pdf.

  4. 4.

    Xinhuanet (2013).

  5. 5.

    Fei’er (2013). http://www.globaltimes.cn/content/788360.shtml#.Uybq6_mSwuc; International Monetary Fund, “Financial Sector Assessment Program of the People’s Republic of China.” IMF Country Report No. 12/81. Washington, D.C.: IMF. P7.

  6. 6.

    Leesa Shrader and Eric Duflos, China: A New Paradigm in Branchless Banking, Working Paper CGAP. http://www.cgap.org/publications/china-new-paradigm-branchless-banking.

  7. 7.

    Leesa Shrader and Eric Duflos, China: A New Paradigm in Branchless Banking, Working Paper CGAP. http://www.cgap.org/publications/china-new-paradigm-branchless-banking.

  8. 8.

    Butani (2012). http://www.fonearena.com/blog/59613/mobile-subscriber-base-in-chinacrosses-1-104-billion-with-revenues-over-116-26-billion-in-2012.html.

  9. 9.

    Wei and Zhao (2016).

  10. 10.

    Yang (2013), pp. 118–127.

  11. 11.

    Website is www.12363.org, consultation and complaint telephone number is (0086)-12363.

  12. 12.

    Dias (2013).

  13. 13.

    One of indicators of judging bank-led Model is that the third-party payment institutions are not allowed to provide cash services according to current laws and regulations.

  14. 14.

    iResearch, “Research Report on Online Credit Loan Clients”, 2015. www.iresearch.cn.

  15. 15.

    Yin (2014), pp. 75–76.

  16. 16.

    Reference to Electronic Signature Law of the People’s Republic of China (2015Amendment), http://www.miit.gov.cn/n11293472/n11294912/n11296092/16817369.html.

  17. 17.

    Yang Bai, Ji chen, “Facts Research of Ezubao Illegally Absorbing Funds Case”. Reference to the Supreme People’s Procuratorate of the People’s Republic of China’s website: http://www.spp.gov.cn/zdgz/201602/t20160201_111982.shtml.

  18. 18.

    Ranran Zhao, “The “Helping Hand” of Internet Financial Supervision”. http://mp.weixin.qq.com/s?__biz=MzI2OTA5MjQ0NQ==&mid=400574136&idx=2&sn=bac6a5c356ced2564c8b00df71d42dab&scene=23&srcid=032679qBfCE6DTh8wZXOy42D#rd.

  19. 19.

    Zhao and Luo (2014), pp.118–126.

  20. 20.

    Ranran Zhao, “The “Helping Hand” of Internet Financial Supervision”. http://mp.weixin.qq.com/s?__biz=MzI2OTA5MjQ0NQ==&mid=400574136&idx=2&sn=bac6a5c356ced2564c8b00df71d42dab&scene=23&srcid=032679qBfCE6DTh8wZXOy42D#rd.

  21. 21.

    Xueli Cheng etc., “The Main Problems of Internet Financial Platform Trading of Credit Assignment”, http://www.chinalawinsight.com/2015/03/articles/finance/%E5%80%BA%E6%9D%83%E8%BD%AC%E8%AE%A9%E7%B1%BB%E4%BA%92%E8%81%94%E7%BD%91%E9%87%91%E8%9E%8D%E5%B9%B3%E5%8F%B0%E4%BA%A4%E6%98%93%E5%B1%82%E9%9D%A2%E7%9A%84%E4%B8%BB%E8%A6%81%E9%97%AE%E9%A2%98/.

  22. 22.

    CGAP (2012).

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Author information

Authors and Affiliations

  1. East China University of Political Science and Law, Institute of BRICS Legal Studies, Shanghai, China

    Yixian Zhao

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  1. Yixian Zhao
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Correspondence to Yixian Zhao .

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Editors and Affiliations

  1. Faculty of Law, Federal University of Rio Grande do Sul, Porto Alegre, Brazil

    Claudia Lima Marques

  2. Faculty of Law, University of Macau, Macau, Macao

    Dan Wei

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Zhao, Y. (2017). Regulation and Supervision of Internet Finance and Consumer Protection in China. In: Lima Marques, C., Wei, D. (eds) Consumer Law and Socioeconomic Development. Springer, Cham. https://doi.org/10.1007/978-3-319-55624-6_26

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  • DOI: https://doi.org/10.1007/978-3-319-55624-6_26

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