The Paypers

The plan, if implemented, would effectively end the government’s laissez-faire approach to the industry. Large internet platforms have tended to resist handing over their data, a crucial asset that helps them run operations, manage risk, and lure new customers.

Chinese regulators, including the central bank, plan to instruct internet platforms to feed their vast loan data to some of the nationwide credit agencies. The agencies, which are run or backed by the People’s Bank of China (PBOC), will share the data more widely with banks and other lenders to adequately evaluate risks and prevent over-borrowing.

The plan adds to recent proposals to sharpen scrutiny of the technology champions and rein in empire building, mainly in the financial sector. The latest regulatory proposal for internet companies also comes as Beijing grows wary of loose risk controls at banks, mainly smaller ones, in terms of consumer loans and their excessive reliance on platforms such as Ant to find customers.

The latest regulatory attempt would likely dampen the scale and profitability of tech majors’ credit businesses. That area is a cash cow, as the companies levy high service fees on banks in exchange for access to millions of customers using propriety data.

China to push its tech giants to share consumer credit data