Members of China’s fintech sector have stressed the importance of state support at an industry conference held in the Guangdong province capital of Guangzhou, as well as called for an increase in direct financing for enterprises.
Qin Hai’ou (秦海鸥), general manager of the Guangzhou Fintech Integrated Services Center (广州市科技金融综合服务中心) said that state support is essential to fintech given the risk-fraught nature of technological development.
“Science and technology are high-risk, high-reward sectors,” said Qin at the 2018 Guangzhou Fintech Summit. “The rewards can reach all areas, including our own lives.
“For this reason fintech requires government guidance, and the participation of the whole of society.”
According to Qin an increase in the share of direct financing would play a vital role in driving the growth of China’s fintech sector.
“The reason that Silicon Valley thrives is that 80% of its funds are from direct financing, while only 20% are from indirect financing,” said Qin.
“In China, however, a large volume of money is from banks, and banks need to control risk. Consequently many enterprises find ti difficult to obtain financing.”
Qin also pointed to the need to vigorously develop China’s angel investment scene.
“In Silicon Valley, there is a large cohort of successful entrepreneurs who serve as angel investors,” he said. “Guangzhou does not lack private equity investment – what is lacks are a large number of successful entrepreneurs who invest in enterprises from the viewpoint of angels.”
Marilyn Librers, President of China Silicon Valley, said that government participation in fintech development was of the “utmost importance.”
Librers pointed out that government can play a co-ordinating role function makes doing business easier for enterprises, while also simplifying procedures and even playing the role of incubator.
He Huaquan (何华权), vice-head of the Guangzhou Financial Work Department, said that the municipal government had adopted multiple measures to vigorously drive the growth of fintech in recent years, leading to the formation of a healthy fintech ecosystem.
“Each year we arrange for fintech development funds in excess of 200 million yuan,” said Yan Yibin (严亦斌), general manager of the Guangzhou Development District.
“[This] provides financial policy support to small and medium-sized enterprises across the whole process from the seed period to maturation.”