China ratings firm raises alarm over Internet loans

Shanghai

SENIOR Chinese government advisers are calling for tighter supervision of peer-to-peer online lending after a ratings company warned 1,250 platforms or more may go bankrupt or run into difficulty.

Authorities should clarify the industry's role and make clear whether it can offer borrower guarantees, Yang Kaisheng, an adviser to the banking regulator and the former president of Industrial & Commercial Bank of China Ltd (ICBC), said at an annual consultancy body meeting on March 6.

Liu Mingkang, the former head of the China Banking Regulatory Commission, said the same day in Beijing there should be rules governing Internet finance in Asia's biggest economy.

"A storm of credit risks is brewing in the peer-to-peer lending industry," said Xu Zhipeng, the Beijing-based president of the data unit at Dagong Global Credit Rating Co, which issued the warning list on March 10. Most investors are individuals and any collapse would "have a huge social impact and affect tens of m…