The development of payment on digital devices is changing people’s communication and consumption mode.

 

On April 22, a report offering a window into the development of the nation’s financial system was released in Beijing.

In a speech at the release ceremony of the China Payment and Settlement System Development Report (2015), vice-president of the Chinese Academy of Social Sciences (CASS) Li Yang said that data on payment and settlement is crucial for the financial industry.
 

This basic information can be used to guide financial regulation and inform the public of the country’s financial health, allowing them to better understand the direction and scale of capital flow, he said.
Li noted that CASS plans to build a think tank at the national level within the Institute of Finance and Banking (IFB) at CASS that would cover research fields related to finance, including banking and macro-economy.
 

Relation to financial stability
The China Payment and Settlement System Development Report (2015) is the third annual report that has been produced by the Research Center for Payments and Settlements of the IFB.

The general report offers an overview of China’s payment and settlement system, including its current status, existing problems and future trends.

Using quantitative analysis, the sub-reports explore the relationship between the payment and settlement system and macroeconomic variables, regional development, financial risk and monetary policy.
 

The section on special topics includes theories and practices employed by payment and settlement systems around the world as well as discussions of hot issues in the field in 2014.

The report pointed out that the payment and settlement system is closely related to monetary policy and financial stability. As the operations of the modern financial system become increasingly mature, the boundary between banks, non-bank financial institutions, securities, and other payment and settlement platforms is blurring, posing challenges and problems for all the countries in terms of coordinating functions of supervisory departments and the shift from supervision by institutions to supervision through functions.

 
In 2014, the payment and settlement system of China’s central bank functioned well, according to the report. For this year, the report recommends that the central bank act in accordance with the strategies of comprehensively deepening the reform and opening-up and improving socialist rule of law with Chinese characteristics.

IT challenges
Today, the widespread use of modern information technology, especially the Internet, has radically changed the structure and methods of the payment service. While individuals and companies are benefiting from the increased efficiency of payment and settlement brought by information technology, there is growing concern about the potential risks involved.

In light of these circumstances, it is inevitable that some of original regulations will not be suitable to the new situation, and new regulations are still inadequate. It is essential to grasp the potential risks and formulate new industrial rules based on international conventions and China’s own situation as soon as possible, according to the report.
 

Scholars attending the event emphasized the need to strike a balance between efficiency and risk when developing the payment and settlement system because the economic and social changes spurred by the new technology revolution cannot be stemmed.
 

The report aims to summarize and reflect the various aspects of China’s payment and settlement system and their implications for the real economy. With ample data and detailed analysis, the report tries to provide reliable and useful references for financial institutions, researchers and regulatory authorities.

 

Wang Chunyan is a reporter at the Chinese Social Sciences Today.