Macro-Finance Salon (No. 53) and Fintech Open Classes (No. 1): Digital Inclusive Finance in China

On the evening of April 11, the Macro-Finance Salon (No. 53) and Fintech Open Classes (No. 1) was held in Renmin University of China. The event was hosted by IMI and the Global People of the People's Daily magazine, with the Zhejiang University Academy of Internet Finance as the co-organizer. Professor Huang Yiping, Associate Dean of the National Development Research Institute and Director of the Digital Finance Research Center of Peking University, gave a keynote lecture on "Digital Inclusive Finance in China". The lecture was presided over by the Associate Dean Zhao Xijun of School of Finance, RUC. Professor Huang Yiping started from the meaning of digital finance and its status quo, focusing on the three defining factors for the current development of China's digital finance: the lack of traditional financial supply, the rapid development of digital technology, and relatively loose regulatory policies. He mentioned four major forms of digital finance in the current market, including online payment, online loans, online investment, and digital insurance. He pointed out that digital finance provides enormous technical support for commercial banks against the background of the economic restructuring, leading to a sharp increase of Internet business of the banks. According to China’s own social reality, digital technology presents two major advantages for the Inclusive Finance: better long tail effect and lower marginal cost. But at the same time, Professor Huang Yiping also pointed outcome of the most outstanding problems faced by digital inclusive finance through the analysis of the digital financial sentiment index from Peking University. In his view, although the digital finance and traditional finance face slightly different risks, the underlying cruxes remain the same: information asymmetry. Therefore, we have to solve them through the "online by data, offline by due diligence and mortgage" approach. Through the discussion on cases of P2P platform reform last year, he introduced some attempts by the international regulators for preventing digital financial risks. Professor Huang also put forward some policy suggestions on how to balance innovation and risk. Zhao Xijun made his own comments regarding professor Huang’s keynote lecture. He believed that the internet finance has solved the transfer of liquidity which may result in default. And the transfer of information may lead to errors or unbearable risks, which all may be associated with the emergence of new formats of finance. So, we have to utilize new solutions to the new problems which appear with the emergence of new economic formats.

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