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Business / Economy

Chinese regulators lend support for competition

(Xinhua) Updated: 2014-03-07 14:02

Chinese regulators lend support for competition

Chinese regulators lend support for competition

Users are allowed to bid for cabs by adding an additional flat fare, but they do so at the expense of the monopolizing cab companies that provide dispatch services to cabbies.

Millions have applauded the emergence of these technology-enabled ventures, but many others were also unnerved.

Big banks are unhappy about online finance funds taking a bite off of their profits. Yu'ebao and its peers were quickly labeled "blood suckers" by commentators, even though the public saw the banks and their low rates as miserly.

Meanwhile, there have also been rumors flying among taxi drivers that the authorities are considering banning the use of taxi-booking apps for good.

The dust only seemed to have settled after authorities weighed in.

China will not ban Internet finance, but will improve regulations in the area, said Zhou Xiaochuan, governor of the central bank.

"China encourages technological applications in the financial sphere," he said.

Yi Gang, another vice governor of the central bank, also said the central bank supports innovative financial products like Yu'ebao, but will take "appropriate" measures to prevent possible risks arising from the sector.

In a draft government work report submitted to lawmakers for review Wednesday, Premier Li Keqiang promised to "promote the healthy development of Internet banking."

Li Dongsheng, a national lawmaker and head of TCL Corporation, one of China's leading consumer electronics makers, said the word "healthy" indicates that authorities will try to regulate and guide the development of the booming sector.

Meanwhile, Minister of Transport Yang Chuantang also said Wednesday that cab-booking apps represented "an easier and more effective service model."

"Generally speaking, we support the taxi-booking apps, although we still have to make some adjustments and improve regulations there," Yang said, citing concerns that the apps may create an unequal playing field for both drivers and passengers.

Already, the central government has pledged to speed up the development of a mixed-ownership economy by letting non-state capital into more state projects, including those in oil, railways and telecoms.

"We will formulate measures for non-state capital to participate in investment projects of central government enterprises," Premier Li said in the draft government work report.

Non-state capital will be allowed to participate in projects in areas such as banking, oil, electricity, railway, telecommunications, resources development and public utilities, according to the report.

"In future reforms, authorities not only have to seek progress in the marketization of the production factor market, but should also push for breakthroughs in the reforms of monopolized industries," said Chi Fulin, head of the Hainan-based think tank China Institute for Reform and Development.

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