Liu Zhiqin, a senior fellow at the Chongyang Institute for Financial Studies of Renmin University of China, was interviewed by CCTV China 24 program on regulation of P2P on Aug.25th.
Q. What do you think of the new regulations on P2P? What do you think of its impact?
A. Since last December the draft has been circulating in the companies involved. That is good for the safety of the market. If there were no regulations, no rules, there would be no business. P2P is good for financing, but in China, in some area, it became a disaster that harms the stability of the society.
Q. Would over regulating be possible?
A. Over regulating is a special word for this case. In the last one or two years, this market is less regulated. That means the companies and individuals lost their money in the market, they had huge hope for the market but lost everything. This is very dangerous for the market, and the international community is also concerned about the stability of Chinese finance situation. P2P is an imported item from overseas. How to transplant this product into Chinese real economy? That is a big problem. That is why the guideline should have been in use long before. But late is better than never.
Q. You still think that P2P lending will still exist, even prosper?
A. I think P2P will still exist, but in a different scale and in a different form. P2P is not for the big players in the market, but for the small players, the individuals. That is why the guidelines are so important for the individuals. SMBs(small and middle sized banks) are happy to have such regulations.