Abstract

Fintech (the application of digital technology to financial services) has witnessed unprecedented growth, bringing significant implications for the financial system and sustainable development.1 The Financial Stability Board, an international body that monitors and makes recommendations about the global financial system, defines fintech as “technologically enabled financial innovation that could result in new business models, applications, processes, or products with an associated material effect on financial markets and institutions and the provision of financial services.”2 The use of technology in finance is certainly not new—consider the growth of electronic banking and high-frequency trading in the early 2000s. In the past two decades, however, novel applications of technologies such as big data, blockchain, artificial intelligence (AI), and the Internet of Things, combined with the rise of digital platform companies and the organizational leverage of their platform business model, have enabled innovations ranging from mobile payment and online lending to crowdfunding and robo-advisers, transforming finance and our everyday lives.3 Asian economies have seen strong growth in fintech. Given that mobile phone ownership exceeds bank account ownership in much of Asia, fintech offers the promise to drive financial inclusion for the underbanked, mobile-first population.4 Fintech platforms can also reduce transaction costs through trusted digital infrastructure and increase trade and financing opportunities for businesses, especially micro, small, and medium-sized enterprises (MSMEs) with limited access to traditional banking. The rise of digital platform companies has accelerated digital transformation for firms in all industries, which is crucial to post-pandemic recovery in Asia.5 Transnational business networks are key enablers of fintech ecosystems.6 Cities such as Singapore, Hong Kong, Shanghai, Beijing, Seoul, Tokyo, and Mumbai have emerged as key global fintech hubs.7 Among Asian economies, China has become the largest fintech market and leading innovation ecosystem, and its fintech businesses are on the verge of internationalization. This essay examines major political and regulatory challenges that private Chinese fintech firms can face in their international expansion and outlines business strategies that firms may adopt in investments, business partnerships, and stakeholder engagement to navigate the changing geopolitical environments.

Document Type

Article

Publication Date

1-2024

Notes/Citation Information

He, Y. (2024). Chinese FinTech Goes Global: Political Challenges and Business Strategies. Asia Policy, 19 (1), 35-50. https://doi.org/10.1353/asp.2024.a918869

The roundtable can be accessed at https://www.nbr.org/publication/chinas-tech-policies-and-development-responding-to-great-power-competition/

EMBARGO TIME FOR INSTITUTIONAL REPOSITORY: 6 MONTHS

Digital Object Identifier (DOI)

https://doi.org/10.1353/asp.2024.a918869

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