(Yicai Global) Oct. 20 -- Competition in China’s financial sector is high and monopolistic practices and unfair competition are prominent in some areas, according to the head of the country’s banking and insurance watchdog, with more rectification on the cards before year-end.

“Most of the issues that financial authorities raised have already been addressed during the rectification of 14 internet platforms, but more adjustments will be made by the end of the year,” Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, told Xinhua News Agency yesterday.

“China insists that all financial services are licensed, and it treats businesses and entities equally, with zero tolerance for illegal financial activities and regulatory arbitrage,” Guo said in an interview.

The degree of competition in China's financial sector is very high, Guo said. Of the more than 4,000 institutions, the market share of the four major banks -- Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank -- is only about 34 percent, with industrial concentration much lower than in developed countries such as the United States, Japan, the United Kingdom, and France, he said.

Guo said Chinese insurers can expand their business across the country, as China’s mobile payments, online credit, and internet insurance sectors, areas dominated by private capital, are booming.

Monopoly and unfair competition takes three forms, Guo said. First, after industrial capital acquires a stake in or takes control of a financial institution, commercial risks may become financial risks if there was any irregularity in the move.

Second, some companies and individuals carry out financial activities under the banner of “financial innovation” and “internet finance,” in violation of laws and regulations. These bank-like platforms are not subject to capital, market, and regulatory constraints as are banks, and cannot carry out risk management and control, so they are very likely to affect financial activities in many fields.

Third, some large internet platforms are involved in a variety of financial businesses and unfair competition practices. Some have formed monopolies that hinder fair competition, some violate financial rules and confuse financial business with other commercial activities, increasing the potential risk to the financial system, and others cause users to over consume, damaging their legitimate rights and interests.

Editor: Futura Costaglione