IMF tells China to use fintech for Belt and Road

Christine Lagarde used her speech to tell Chinese elites to embrace fintech further

One of the less noticed aspects in the spectacular launch of China’s Belt and Road was Christine Lagarde’s advice that fintech should take centre stage. 

IMF head Christine Lagarde has advised China’s political class that fintech should take centre-stage in its One Belt, One Road initiative.

Speaking in a breakout session at the Belt and Road’s extravagant launch, Ms Lagarde put forward her suggestion that fintech should be a priority. 

“[Another] policy priority is to harness the power of financial technology, or fintech,” Ms Lagarde said. 

“A good example is the rapid growth of mobile banking, which has boosted the economic wellbeing of hundreds of millions of citizens—from Bangladesh, to Kenya, to Peru.

“Another example is the rapid increase in cross-border payments based on virtual currencies. For many companies and households, this is a faster and cheaper way of transferring money overseas.”

Her warm words for fintech were tempered, however, with warnings against the risk of money laundering and terrorist financing that fintech could enable. 

“Fintech providers, financial regulators, central bankers, and international organizations will need to work together to ensure that financial systems are safe,” she said. 

Ms Lagarde’s speech was well-received and well-reported in the Chinese media. 

The Chinese’s government and media’s kind reception of the IMF is something of a peculiarity as many Chinese political elites regard the body - headquartered in Washington and supermajority owned by the United States - as a prop of the US Treasury. 

Ms Lagarde’s speech was also taken as the occasion to unveil a new UN report, which examined how far Chinese companies, including fintechs, had gone global.