China’s Wilting Consumer Lenders Need Some Relief
The government’s clampdown may have gone too far.
Regulation became inevitable after the Ezubo fraud.
Photographer: Greg Baker/AFP/Getty Images
China’s consumer finance industry is sagging under an intensifying campaign of regulation. That could be a problem for an economy that’s relying on domestic demand to sustain growth amid the trade war with the U.S.
The government has started a fresh round of checks on thousands of peer-to-peer lending sites, Bloomberg News reported last week. Meanwhile, shares of U.S.-listed cash-loan provider Qudian Inc. fell 12 percent on Friday after a separate Bloomberg report that it would lose access to customers through Ant Financial’s Alipay app. While a commercial matter rather than a regulatory action, Qudian’s slump underlines the travails of an industry that’s increasingly out of favor with authorities.