On July 15-16, 2017 we hosted the annual Lang Di Fintech conference. Lang Di is the largest and most prestigious fintech event in China, and it is one of LendIt’s cornerstones, including our USA and European conferences. For two days in Shanghai, the world’s fintech leaders gather for a truly unique conference experience, networking and peer sharing.
Leading up to Lang Di, we led a weeklong tour of China – to Macau, Hong Kong, Beijing and Shanghai – with an elite group of executives from all over the world. On Tour and at Lang Di we gained keen insights, planted and cultivated the seeds of business development, and developed a strong bond among each other and many of our Chinese hosts.
What follows are some of the observations I made while there.
In China there are more than a billion consumers that are generally underserved across a broad spectrum of financial services, making for a diverse and exciting array of opportunities to address. Yet China is dominated by giants – institutions like Bank of China and technology firms like Alibaba –companies that have tens of thousands of employees and hundreds of millions of customers. The scale of the opportunity is enormous, and so is the size of the companies trying to address it.
This is not to say that small businesses cannot survive. In the much-anticipated comments of Mr Sun Guofeng of the People’s Bank of China (PBoC), the standing-room only audience heard a clear message that the government wishes to provide an umbrella of support to the emerging Chinese fintechs. Many of my Chinese colleagues were simply elated to hear the remarks of Mr Sun. It was a brilliant speech. Brilliant. Why? He pronounced a message and a mission: first, that China is a fintech leader, second that China must lead the world, and third that challenger fintechs were important players in the plan.
Consumer protection is important (do you hear the rattling of the sabre?) but at the same time, we want to keep the good among us (do you see the passing of the olive branch?). The PBoC wishes to harmonize and rationalize the regulations, and allow for the convergence of fintechs and banks. While the focus may be on the “national champions,” the PBoC won’t let them choke out the upstarts. In essence, the government of China is placing a protective order around innovation and entrepreneurship. If this sounds strange or surprising to you, it’s time to get beyond the headlines and visit China to see for yourself what’s really going on there: a massive onslaught of entrepreneurship the world has not witnessed since the post-war American boom.
An American in Shanghai
The six-term senator from Montana, former Chairman of the Senate Finance Committee and former Ambassador to China, Max Baucus, gave a charged speech on his views of Sino-American collaboration in the new world of Ethereum, Alipay, IBM Watson and Amazon Web Services. “The living standards of our children and grandchildren depend on us getting along,” he said. With $60 billion in trade between the countries, more than 2 million travel visas and 300,000 student visas issued each year, our countries are irreversibly intertwined. It is essential that the citizens of our countries understand and respect each other, and enjoy the benefits of working together.
Ambassador Baucus praised China for its energy, enthusiasm and pragmatic spirit. China is leapfrogging US payment systems with Alipay and WeChat Pay, two mobile-only QR-based payment systems that have seen rapid, massive adoption and will soon render cities and villages all across China cashless and cardless.
American companies who do best in China spend a lot of time here, said Baucus. His one word of advice: “just go.” Get out the door, get to China, and meet your counterparts. It’s important for America, and it’s important for you. Sure, it may be intimidating to huck yourself over the border, but personal relationships are critical to the Chinese. They will respect you for trying, so long as you approach them with an empty cup.