Fintech File photo: VCG

Fintech is essentially a technology-driven financial innovation activity, which should be regulated and licensed to operate. Any "pseudo-innovation" should be severely cracked down on and violations of laws should be treated with zero tolerance, Shang Fulin, Standing Committee Member of the Chinese People's Political Consultative Conference (CPPCC) National Committee said on Monday. 

The remarks were made by Shang, who's also the director of the CPPCC Economic Affairs Committee, in an interview with domestic news site STCN.com.

Shang also called for efforts to continuously improving the regulatory system when it comes to fintech and enhancing its relevance, applicability and operability, advising the government to handle the relationship between financial development, financial stability and financial security, and create a market environment of fair competition, to break monopoly, and prevent the disorderly expansion of capital, according the STCN.com.

Shang's remarks also come as the central government and relevant authorities have stepped up regulation within the country's rising fintech sector and anti-monopoly efforts over the past months. 

During the ongoing two sessions, a key event in the country's political calendar, China for the first time said in its government work report that it will step up efforts against business monopolies in a bid to ensure fair market competition. China will step up efforts against business monopolies, guard against unregulated expansion of capital, and ensure fair market competition, said the 2021 Government Work Report released on Friday.

The state supports platform enterprises in pursuing innovative development and enhancing international competitiveness, while ensuring that their business operations are well-regulated in accordance with the law, read the report.

The country's financial regulators have vowed several times to implement new measures to further promote China's financial sector's development including strengthening regulations governing the fintech sector, releasing accurate monetary policies, and further opening up China's financial sector.

Previously, Ant Group saw its planned dual listings in Shanghai and Hong Kong stock markets come to a grinding halt on November 3 last year amid regulatory changes that aim to put fintech businesses on an equal footing with traditional financial institutions when it comes to capital requirements and regulation.

Ant Group, backed by Jack Ma Yun, billionaire founder of China's e-commerce platform Alibaba, was set to sell shares in both bourses that raise more than $30 billion.

More regulations aiming to better regulate the sector have also coming up recently. China's State Administration for Market Regulation (SAMR) in February published the finalized anti-monopoly guidelines for the platform economy, which vows to protect fair competition in the market.

The guidelines also said the market should adhere to the same and equal treatment of market entities, focus on preventing and stopping monopolistic behaviors, prevent the disorderly expansion of capital and support the innovation and development of platform enterprises.

Guo Shuqing, chairman of China Banking and Insurance Regulatory Commission (CBIRC), said at a news conference on Tuesday in Beijing that internet payment companies must meet the lowest national requirement of capital adequacy ratio of 8 percent as commercial banks, before they operate financial services.