After turbulences in the stock and real estate markets, China’s next speculative asset bubble might be building in the Fintech sector. Stricter regulation won’t solve the underlying problem: the lack of attractive investment options caused by low interest rates and capital controls will keep producing new bubbles.
China aims to fight growing risks in its financial sector with restrictions on shadow banking assets and interbank lending. But a sudden reduction of liquidity could increase rather than reduce the risk of a financial panic and dampen growth.
International businesses in China struggle to comply with new regulations, which force them to store critical data within China's borders, limit the application of foreign encryption services, and require handing over customer data of terror suspects.
China sets its hopes on e-mobility. Smart and forceful industrial policies are geared toward grooming domestic brands and keeping foreign competition at bay. Governments and manufacturers in industrial countries will have to act fast to counter this trend.
China’s industrial policies aim to build national champions via acquiring technological knowledge abroad. This goal may be in line with the current worldwide wave of economic nationalism, but it is likely to collide with the strategic aims of increasingly globalized Chinese companies.