Since moving to Beijing, I have been immersed in the massive scope, high intensity, and fascinating idiosyncrasies of China’s financial system and tech sector. Like over 500 million Chinese consumers, I regularly use just one cell phone app to pay bills and buy meals; but at some stores, you can now just scan your face. To the office, I often order coffee deliveries from an unprofitable company valued at over $2 billion. It is fueled by China’s energetic venture capital markets, which, having pumped over $100 billion into Chinese start-ups last year, are the second largest in the world. Beijing’s high-tech Haidian district, a major hub of this activity, provides a fitting setting for my research on emerging trends in equity markets structure at Tsinghua University.
Over hot pot and Tsingtao beer in Haidian, investors, computer scientists, and academics explore the exciting future of finance, as well as challenges and risks posed by new technologies. On subways home, young professionals refresh red and green numbers on their phone (81 percent of Chinese household investors trade stocks at least once a month; in the U.S., it’s just 15 percent). At one recent dinner, I saw how, with a few phone taps, one can near-instantly take out a sizable loan from a Chinese non-bank whose outstanding consumer loan balance, reportedly over $95 billion, likely exceeds that of some bank competitors. With lightning speed, extraordinary data points and once unfamiliar technologies are becoming quite commonplace.
Through research in Beijing, I am gaining a better understanding of financial system changes that enabled these and other market phenomenon. My current focus is examining how stock market structural shifts have and could impact access to capital for Chinese businesses from both domestic and international investors. Ever-apparent are the impacts of innovative technologies to financial markets, and the ways by which vibrant capital markets fuel technological change.
Concurrently, through an independent research effort in Singapore, I am learning from investors, technologists, entrepreneurs, and regulators about decentralized networks and financial market structures being designed to advance financial inclusion and privacy. Using distributed ledger technology, one project records Burmese farmers’ cattle ownership and enables those farmers access to collateralized loans and insurance products otherwise unavailable. As it designs regulatory approaches, the Monetary Authority of Singapore collaborates with and learns from innovators, encouraging a culture of experimentation.
Over delicious regional cuisines in hubs of innovation such as Beijing, Hangzhou, Shanghai, Shenzhen, Singapore and Tokyo, new friends and I often wonder what turbulent times for financial markets, cyberspace, and Sino-U.S. relations mean for the future. Notable anniversaries of the last few months provided good reasons for reflection: the 40th anniversary of normalized U.S.-China relations and the “reform and opening-up” of China’s economy; the 10th anniversary of the global financial crisis, unprecedented central bank responses, and Bitcoin’s release.
With increasing intimacy, I understand how various market events, public policies, and technological changes of 2019 could result in very different anniversaries to reflect upon in 2029. But I remain largely optimistic, and quite excited to continue forging friendships over hot pot and at hawker centers learning not only about capital markets fueling innovation and economic progress, but also how technology can improve financial market structure and access.
