Financial services companies in China are becoming increasingly reliant on artificial intelligence (AI) technologies to reduce costs, improve efficiency, and become more customer-centric. The changes unfolding in China’s financial technology (fintech) market will present opportunities and challenges for US companies looking to compete or enter this industry, especially in light of China’s efforts to master the entire industrial chain for AI-based fintech.
China Market Intelligence
A survey conducted by the Pew Research Center in the summer of 2019 reveals the changing tide of public opinion regarding China, the challenge it poses for the United States, and how that challenge should be addressed. Laura Silver, the lead researcher on the project, shared key findings in a presentation to USCBC members:
Official relations between the United States and Hong Kong are governed by the United States-Hong Kong Policy Act of 1992 (“Policy Act”), which recognizes Hong Kong as an entity distinct from mainland China for the purposes of US law.
Market access issues related to standards persist while non-science-based standards and unclear distinctions between mandatory and voluntary standards add challenges to compliance. While access to standards setting has improved, many intangible barriers remain. Companies that position themselves as industry leaders and work through associations to build industry consensus often enjoy greater success in influencing standards.
US-China tensions are negatively impacting US company competitiveness and eroding market share. Some companies selling products or services to state-owned enterprises are sensing government procurement discrimination and project opportunity exclusion. Many companies are reinforcing efforts to maintain relationships with their customers and standardizing how they respond to inquiries about supply.
SAMR has launched a series of enforcement campaigns in 2019 with a particular focus on unfair competition, intellectual property, online platforms, advertising, and food safety. Though the campaigns have primarily targeted domestic companies, vague regulatory guidance and enforcement pose potential risk for foreign companies.
When Hong Kong was returned to China by the United Kingdom in 1997, it was supposed to maintain its independent social, legal, and economic systems until at least 2047. This served as the basis for the United States-Hong Kong Policy Act passed in 1992, which upholds that the United States continue to treat Hong Kong separately from the mainland for trade, export controls, and other purposes, unless the president determines through an executive order that Hong Kong is no longer sufficiently...
China’s push for civil-military integration (CMI) has intensified US concerns that cooperation with China on dual-use technologies will aid China’s military modernization efforts to the detriment of US national security. CMI has risen to a new level of importance under President Xi Jinping, who elevated it to a national strategy in March 2015 and established a high-level Party policymaking body to centralize leadership of CMI in January 2017.
A recent State Council notice that calls for deepening reforms across the Chinese bureaucracy—“Fang Guan Fu” reforms for short—outlines Chinese government plans to improve its business environment.
While China continues to be a priority market for most of the companies surveyed in the US-China Business Council’s (USCBC) forthcoming 2019 Member Survey, market optimism is moderating. In addition, the deteriorating bilateral relationship and concerns about competing on a level playing field are measurably impacting American companies operating in the China market.