China’s digital finance is oriented toward the real economy, shedding light on that of other Global South countries

The next phase of global development will not be decided by trade corridors alone. It will be determined by how effectively financial systems integrate with technology. In this respect, China’s outline of the 15th Five-Year Plan (2026-30) for national economic and social development sends a clear signal: finance is becoming an active engine of economic growth.

This shift matters far beyond China. For other countries across the Global South, the real question is no longer whether to adopt digital finance, but how to do so in a way that is inclusive, resilient and aligned with domestic development priorities. China’s experience offers a compelling answer — not as a template to copy, but as a framework to adapt.

For decades, one of the biggest challenges for developing economies has been financial exclusion. Traditional banking systems are costly to build, slow to expand and often concentrated in urban areas. As a result, millions remain outside formal financial networks, limiting both household welfare and business growth.

China has made substantial progress in overcoming this constraint. Through mobile payments, digital platforms and data-driven credit systems, it has transformed financial access into a scalable public good. This is a transformation driven not by market forces alone, but by deliberate national strategy embedded in successive five-year plans.

The lesson for other Global South countries is straightforward but powerful: digital finance does not just complement traditional banking — it can function as a transformative force to improve the whole banking system. Thailand and Indonesia have already demonstrated this potential. Thailand’s PromptPay system and Indonesia’s QRIS infrastructure have significantly reduced transaction costs and expanded access to financial services. In October 2025, Thailand launched a direct cross-border QR payment service with China — a milestone linking the two countries’ instant retail payment systems to foster greater integration in trade, investment and tourism. Yet deeper transformation lies ahead: integrating these systems into a broader digital financial architecture that reaches informal sectors, rural communities and small enterprises.

The global financial system is entering a period of fragmentation. Geopolitical tensions, risks of sanctions and currency volatility are reshaping how countries think about financial dependence. For many developing economies, reliance on external clearing systems, particularly those dominated by the US dollar, creates vulnerabilities that are increasingly difficult to ignore.

China’s response has been proactive. By expanding cross-border renminbi settlement, advancing the digital renminbi and developing independent fintech platforms, it is building alternative channels for financial interaction. According to the People’s Bank of China, as of the end of November 2025, China had recorded 3.48 billion cumulative digital renminbi transactions worth approximately $2.37 trillion — this is no longer an experiment.

For other Global South countries, the ability to diversify payment systems, settle trade in local currencies and reduce exposure to external shocks enhances both economic resilience and policy autonomy. The Association of Southeast Asian Nations’ growing emphasis on local currency settlement reflects this shift. Technology is the enabler that makes it viable at scale, and Thailand and Indonesia — as two of the region’s most digitally advanced economies — are well positioned to lead.

Perhaps the most important aspect of China’s fintech policy is its orientation toward the real economy. Unlike models that prioritize financial liberalization or speculative innovation, China emphasizes the role of finance in supporting industrial upgrading, technological innovation and rural development.

Many developing economies have experienced the risks of premature financialization, where financial expansion outpaces productive capacity. China’s approach suggests a different path: fintech is not an end in itself, but a tool to channel capital into sectors that generate long-term value.

In Thailand, this could mean leveraging digital finance to strengthen small and medium-sized enterprises, agricultural supply chains and tourism-related services, sectors that form the backbone of the economy. In Indonesia, it could involve deeper integration between fintech platforms and manufacturing or green energy initiatives. The ASEAN-China Free Trade Area Version 3.0 goes beyond tariff reduction to address digital integration, with e-payment systems taking center stage. Successful tech-finance ecosystems are not imported, but built around local economic structures.

China’s role in global fintech is not confined to its domestic market. Through the Belt and Road Initiative, the Asian Infrastructure Investment Bank and BRICS cooperation, it is actively sharing financial technology solutions with other developing economies. In May 2026, China and ASEAN launched the China-ASEAN Artificial Intelligence Industry Innovation Center, aimed at building a shared digital ecosystem with harmonized data governance and interoperability.

What distinguishes this model is its pragmatism. It is typically demand-driven, focused on implementation and less constrained by the policy conditionalities that have traditionally accompanied development assistance. In Southeast Asia, Chinese fintech firms have already contributed to improving efficiency in local financial systems. The next step is to move from bilateral projects to integrated regional ecosystems.

ASEAN is uniquely positioned to translate these ideas into reality. The region combines high digital adoption, strong trade linkages and ongoing policy coordination. Initiatives such as regional payment connectivity are already laying the groundwork for deeper financial integration.

Thailand and Indonesia stand out as key nodes in this process. Thailand’s interoperable payment systems, anchored by PromptPay and its cross-border QR linkage with China, and Indonesia’s rapidly expanding digital economy provide complementary strengths. Together, they illustrate how tech-finance can move from concept to implementation at a regional scale.

The opportunity now is to scale up. This means going beyond payments to include digital identity systems, cross-border credit frameworks and regulatory harmonization. The broader lesson from Southeast Asia’s payment revolution is clear: Seamless small-value transactions make trade and commerce more efficient, and the region is developing an ASEAN-wide QR framework with the potential to make paying abroad as easy as paying at home.

China’s financial development during the 15th Five-Year Plan period can mark a shift from financial expansion to financial transformation. Technology is no longer peripheral — it is central to how finance operates, evolves and contributes to growth.

For the whole Global South, this may represent a strategic inflection point. The tools for building inclusive and resilient financial systems are more accessible than ever. The cost of inaction, however, is rising. Countries that fail to integrate into emerging digital financial architectures risk falling further behind.

The choice is not between adopting China’s model and maintaining the status quo. It is between engaging with a rapidly evolving financial paradigm and being constrained by outdated systems. Fintech is not a future possibility — it is a present reality.

In this new landscape, those who move first will shape the rules; those who hesitate will follow them.

Nisit Panthamit is the director of the Center for ASEAN Studies at Chiang Mai University, Thailand. Paisarn Panthamitr and Nitchanat Phengphum are researchers at the Center for ASEAN Studies at Chiang Mai University.

The authors contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.