Beijing Calls for Reductions in Payments Costs, Accelerated Use of Digital Renminbi to Drive New Forms of Consumption

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The Chinese central government has outlined a range of financial measures to help expedite new forms of consumption in the wake of the COVID-19 pandemic.

On 25 March a group of 24 Chinese regulators including the People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) jointly issued the “Implementation Plan for Accelerating the Cultivation of New Forms of Consumption” (加快培育新型消费实施方案), outlining a range of measures in relation to fintech innovations and payments costs to spur domestic consumption.

Article 17 calls for guiding banks to engage in the “prudential and standardised development of consumer finance products and services, and drive expansion in the vigour of credit support for new forms of consumption.”

The Implementation Plan commits to “organising and undertaking fintech application trials and improving contactless financial services.”

Article 19 calls for “reducing platform transaction and payments costs,” and “guiding home delivery, online ride ordering, e-commerce and other Internet platforms in rationally optimising fees for small and medium-sized vendors and individuals for operation via platforms.”

It also encourages commercial banks, non-bank payments entities and settlements organizations to engage in “the innovation of new measures to optimise fee collection in relation to mobile payments, and reduce small and medium-sized vendor payments services costs.”

In order to further drive consumption Chinese regulators will “accelerate the promotion of trials for the Digital Renminbi, preferentially select cities where new forms of consumption thrive, and focus on raising the operating efficiency of finance and reduce financial transaction costs.”

The National Development and Reform Commission (NDRC), the Ministry of Transportation, the Ministry of Commerce and PBOC will be responsible for handling of these measures.

Article 23 outlines “improvements to standards for the next generation of information technology such as new infrastructure, and support for the accelerated development of new forms of consumption.”

This will include the “accelerated formulation, promotion and implementation of standards in areas including big data, cloud computing, artificial intelligence and the blockchain, and strengthening of standards for new technology financial applications.”

Authorities responsible for these measures will include PBOC, the Ministry of Commerce, the Ministry of Housing and Urban-Rural Development, the Cyberspace Administration of China and the Ministry of Industry and Information Technology.

Article 24 calls for “deepening cooperation with mobile payments and online transaction platforms,” as well as “researching and establishing indices for new forms of consumption that promptly reflect developments and changes on the market for new consumption.”

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