China Eases Crackdown, Allowing Tech Giants to Expand Lending

As of November 2025, China has taken a more accommodative stance towards the country's internet platforms, allowing them to quietly revive their consumer lending operations. This marks a shift from the regulatory crackdown that began in 2020, when Beijing reined in what it described as the "disorderly expansion" of these tech giants.

The change in approach comes as China seeks to spur weak consumption and manage a trade dispute with Washington. In August 2025, the government introduced consumer loan interest subsidies, naming Ant Group and Tencent-backed WeBank as eligible lenders alongside traditional banks. Industry sources say this move, along with earlier high-level meetings between Chinese leaders and private-sector bosses, has been interpreted as a green light for cautious expansion in consumer lending.

While the "dramatic tightening" in regulations appears to have ended, analysts and executives warn that Beijing may tighten the noose again if defaults surge. The sector as a whole, which accounts for about a quarter of overall consumer lending, is expected to see profits surge 9.8% this year to around 110 billion yuan. However, subdued income growth and a feeble job market are already pushing up consumer-loan defaults, a real concern for regulators.