In China this year, over 3,700 billion RMB (about 570 billion USD) worth of domestic debt will expire, a record-breaking amount. Many companies will face difficulty in rolling the debt over because of the limited size of the whole bond market. Even if just a small percentage of the whole market defaults, the amount defaulting would still be so large, it could start a crushing storm for an already vulnerable Chinese economy. Many defaulting state-owned companies are from sectors in difficulty as China slows, such as mining and heavy industry. This makes the possibility of default more likely to happen. And in the environment of a slowing debt market, things will probably get worse.

Published in China Banking Research

Shanghai Gold Exchange started trading a new gold contract on April 19th. The contract is meant to become a global benchmark similar to the gold fix originated in London and New York, but denominated in RMB.

Published in China Banking Research

There's a clearing platform in development that might change the playing field of the payments industry in China. The Payment and Clearing Association of China had a member congress in April and has approved a proposal to build an Internet payment clearing platform for non-bank payment institutions.

China’s fintech sector has enjoyed significant development, but has recently been constrained by more active regulators who have increased their rate of regulation to try and stay ahead of the industry development. After two years of planning and industry development, a public-private body was established by the People's Bank of China - the National Internet Finance Association.

A tightening regulatory policy towards third party payment has driven China's payment industry into a period of consolidation and M&A. For some, this has been a great opportunity to get into other segments of the market like O2O (online to offline). We saw this in 2015 when Wanda bought 99bill. This time it's Lakala with a help of with a company called ‘Tibet Tourism.’

With an estimated USD 1 trillion worth of capital outflows from Mainland China in 2015, it is clear that a subset of Chinese citizens would rather keep their money outside of China. Following the country’s turbulent stock market and depreciating Yuan, an estimated 100,000+ Mainland Chinese citizens have been venturing out to Hong Kong in order transfer more than the stipulated USD 50,000 outside of China through the means of insurance policies.

Published in China Banking Research

“I don’t really care about what are the investment projects on the P2P platform or the borrowers’ details. My attention is more on the investment return, since most of the platform provide guaranteed return rate.”

Published in China Banking Research

In January 2015, Chang-Go, one of the more successful prepaid card companies operating in China, was ordered by China's Central Bank to stop operations. According to the bank, the company was not giving customers refunds in a full manner, misappropriated reserve deposits and even forged financial documents.

China’s digital travel landscape is a world in its own. Increasingly, globe-trotting Chinese are turning away from prepaid package tours and becoming more mobile savvy in applications from hotel booking to local entertainment. It is estimated recently by Dianping, a restaurant review and coupon website that Chinese outbound tourists are forecast to spend 250 billion yuan (US$39 billion) on food in 2015, 25% more than in 2014.

Early last month, in a statement released from the Monetary Authority of Macau, Alipay was approved for use in Macau's gaming market a fact confirmed by the industry that now macau residents and/or institutions can have an Alipay account and use it for payments.

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