Blockchain and fintech are to be mentioned by name in a draft of China’s 14th Five-Year Plan, marking increased focus on these technologies.

Why it matters: The Five-Year Plan is China’s most senior economic planning document. This is the first time for either technology to earn a mention by name.

  • But the draft plan also calls for more regulatory scrutiny of fintech.

READ MORE: INSIGHTS | Tech in the Five-Year plan

Details: China’s National Legislature opened its annual meeting in Beijing today. It is expected to approve the draft plan during the week-long session.

  • “Drafts are often tweaked during the Lianghui (Two Sessions), but are rarely substantively changed,” Kendra Schaefer, head of tech policy research at Beijing-based strategic advisory firm Trivium told TechNode.

All aboard the China chain: The plan declares blockchain a key technology, along with cloud computing, the Internet of Things, big data, AI, and virtual reality.

  • Specifically, the draft plan calls for work on smart contracts, multiple consensus algorithms, asymmetric encryption, and distributed fault tolerance mechanisms.
  • Distributed ledger technology is to be applied in fintech, supply chain management, and e-governance, the draft plan said.
  • Blockchain emerged as a priority in late 2019, when President Xi Jinping publicly endorsed the technology.
  • Just yesterday, a Beijing-based hardware and software solution announced that it will integrate the digital RMB, China’s central bank-backed digital currency. This is the first known domestic application of blockchain to the digital yuan project.

READ MORE: Enterprise blockchain to integrate China’s digital yuan

Fintech: The phrase “fintech” (jinrong keji) got three direct mentions; under blockchain development, in a section on regulating tech, and financial reforms. This is the first time a reference by name to fintech has made it in the plan.

  • The 13th Five-Year plan made one reference to “internet finance,” and several to fintech-related themes such as “microfinance” and “inclusive finance,” as well as, once, as “internet finance.” Similar language is present in the new draft plan.
  • The plan also called for continued R&D in the digital RMB and China’s participation in the creation of global standards for digital currencies.

READ MORE: DCEP class is in session, with Zhou Xiaochuan

More rules: The draft plan calls for enhanced antitrust rules and licensing regimes for tech platforms, and the establishment of new regulatory frameworks for fintech, telemedicine, autonomous driving, and smart logistics.

  • The plan also called for increased oversight of financial holding companies, a type of corporate structure that is likely (in Chinese) to come to dominate the fintech industry. After months of negotiations with authorities, Ant Group will reportedly reorganize itself as a financial holding company.
  • It also calls for strengthening the use of regtech and risk assessments on financial innovation products, including potentially suspending some products.
  • Today, China’s legislators also called on commercial banks to increase lending to individuals and small and medium enterprises by 30% in the rest of the year. This will potentially substitute for fintech companies. Facilitating small loans is Ant’s single largest revenue stream.

Eliza Gkritsi

Eliza was TechNode's blockchain and fintech reporter until July 2021, when she moved to CoinDesk to cover crypto in Asia. Get in touch with her via email or Twitter.