View of a signboard of, formerly called, an online lending platform of Ping An of China, in Shanghai January 23, 2019. Photo: AFP

The number of Chinese peer-to-peer (P2P) lenders dropped to zero by mid-November from a peak of 5,970 in 2017 after the country increased efforts to crack down on risky forms of financing over the past several years.

The risks of shadow banking have continued to fall in recent years, with the scale of shadow banking shrinking by 20 trillion yuan (US$3.04 trillion) from its historical peak, said Liu Fushou, a lawyer with the China Banking and Insurance Regulatory Commission.

Liu called for efforts to resolutely prevent and fend off systemic financial risks and make the financial sector better serve the real economy.

Shadow banking refers to activities performed by financial firms outside the formal banking sector which were subject to lower levels of regulatory oversight and higher risks.

According to mainland media, the number of P2P lenders in China had increased to 3,844 in 2015 from about 800 in 2013. Between 2006 and 2015, the Chinese banking regulator had remained supportive of the development of the P2P lending industry.

However, it started to strengthen its regulations on the sector in 2015. In August 2016, it launched new guidelines for P2P lenders to fulfill requirements within 12 months.

In 2017, the number of P2P lenders peaked at 5,970 with many of these lenders listing on United States’ stock markets successfully. As the regulator continued to tighten the rules, only 29 P2P lenders were still operating at the end of June this year. In late October, the number fell to six.

Wealth management

China has seen 21 banks set up wealth management subsidiaries, 19 of which have been operational, said Zhou Gengqiang, deputy secretary-general of the China Banking Association.

The products offered by the subsidiaries have played a positive role in creating value for investors and serving the real economy, Zhou said. As part of efforts to fight the Covid-19 epidemic, banks and their subsidiaries have launched special wealth management products to help companies resume work and production, he said.

Up to now, the balance of the wealth management products reached about 3.6 trillion yuan.

Non-manufacturing PMI

The purchasing managers’ index (PMI) for China’s non-manufacturing sector came in at 56.4 in November, up from 56.2 in October, the National Bureau of Statistics said Monday. A reading above 50 indicates expansion, while a reading below 50 reflects contraction.

The non-manufacturing PMI has remained above 50 for nine consecutive months, data from the NBS showed. In November, the service sector continued to accelerate its pace of recovery, with the sub-index for business activities expanding to 55.7 from 55.5 in the previous month.

Thanks to the country’s targeted and timely measures against Covid-19, the consumer market recovered in an orderly manner, and the service sector rebounded steadily, said NBS senior statistician Zhao Qinghe.

A breakdown of the data showed the sub-indexes for business activities of rail transportation, civil aviation and finance remained above 60. Bucking the trend, the sub-indexes for the business activities of property development, ecological protection and environmental management fell below 50 in November, Zhao added.

Outbound investment

China will expand the scale of two pilot schemes that allow domestic investors to access foreign assets, the country’s foreign exchange regulator said Sunday.

The scale of the outbound investment schemes – Qualified Domestic Limited Partner (QDLP) and Qualified Domestic Investment Enterprise (QDIE) – in Shanghai, Beijing and Shenzhen will be expanded in the near future, according to the State Administration of Foreign Exchange.

The move aims to further meet domestic investors’ demand for global asset allocation, it said. The country also plans to launch the pilot QDLP program in the southern island province of Hainan and southwest China’s Chongqing Municipality to better support the construction of the Hainan free trade port and the Chengdu-Chongqing economic circle.

Indonesia’s high-speed railway

A southern Chinese port on Saturday shipped the first batch of made-in-China steel tracks to be used in Indonesia’s Jakarta-Bandung high-speed railway (HSR).

China Railway Nanning Group said the track bars were loaded onto a ship in Fangchenggang, Guangxi Zhuang Autonomous Region, after arriving on trains from their maker Panzhihua Iron and Steel in the southwestern province of Sichuan.

Each measuring 100 meters long, the tracks boarded special trains to reach Fangchenggang, where they were cut into 50-meter ones for the sea journey.

Construction of the 142.3km Jakarta-Bandung HSR project has continued amid the Covid-19 pandemic in Indonesia after changes were made in safety and health procedures at the construction sites. Trains on the high-speed line will run at a designed speed of 350kph. 

The stories were compiled by Nadeem Xu and Shan Hui and first published at

Xu Yuenai is a Beijing-based columnist specializing in international relations.