You would be forgiven for missing the news with most of the focus this week on Shanghai's never ending stock market run or the latest mention of liberialization and opening in the bank card clearing market, but now it appears that the insurance industry will be the next segment of China's transforming financial industry to be opened up to competition.
It appears, as the WSJ reported, that the implementation of China's controversial banking technology rules has been paused for the moment. But what can we expect in the future?
China's P2P industry, which is technically a shadow banking / lending channel, continued its explosive growth in 2014 as 1,200 new platforms launched and transaction volumes grew 2.39 times as compared to 2013. At the same time the number of platforms suffering serious problems was 275, up 260% from the year before.
Talked about for many years, one of the key reforms in China's outsized and ambitious plan is the launch of the deposit insurance program. An announcement yesterday confirmed that the program will finally launch in May.
Shanghai based Lufax, one of China’s biggest P2P platforms, has just received a USD 483 million-worth investment from foreign institutional and private investors. Is the investment rearranging deck-chairs on a sinking ship or a clear signal that everything is fine in the troubled P2P industry?
A few days ago, the upstart Chinese manufacturer of android-based smartphones Xiaomi launched a public beta of their new online money-market fund. With Chinese tech companies furiously investing in and creating platforms bundling key products and services together, could we see Xiaomi competing directly with Alipay and Wechat in the near future?
The China Banking Regulatory Commission (CBRC) released its annual banking industry statistics for 2014. Banks accumulated RMB 172.3 trillion in assets, up 13.87% since 2013. The Big 5 large commercial banks had a slower growth rate than the joint-stock commercial banks, 8.25% and 16.50% respectively.
The recent PBOC annual Payments Industry Overview report shows plenty of impressive data and the main message that comes through is that "everything is growing". However, not all growth is the same and the numbers for credit cards industry are especially interesting.
Personal credit ratings in China have never been a pretty subject. Without a centralized credit database accessible to all, getting accurate credit information has proved challenging for any company in China providing loan products. With Ant Financial, the financial arm of Alibaba, launching Sesame Credit, we felt it was worth taking a second look at what might be happening here.
It's official. Although the bank has already technically been approved (several times), it seems like WeBank, 30% owned by Tencent, will finally make its big splash on January 18th.
According to data from Online Lending House, a China P2P industry data provider, as many as 92 P2P websites had issues in December 2014, significantly more than the 76 that had trouble in all of 2013, Some websites went offline temporarily, some products turned out to be fraudulent and some businesses were closed outright.
Sneaking it in while the west was busy sipping eggnog and taking a break, the Chinese government has big plans for expanding the Shanghai Free Trade zone geographically. The new zone will include some of the most important real estate in Shanghai including the Lujiazui Financial disctrict.