We mentioned earlier this week that there had been a sharp uptick in the Shanghai Interbank rate in the past month. This peaked last night at about 13%. With the attention, rightly so, that this is getting, it's worth taking a look at the issue and what's involved. 

According to China Mobile, China’s largest mobile network operator, its monthly mobile payment transaction value, for the first time, exceeded 10 billion RMB, reaching 11 billion in May – even larger than the total transaction value of 2011.

Since China Mobile launched its mobile payment business in 2009, the number of transaction has rocketed at a staggering rate and it is expected that by the end of 2013 the total transaction value will hit 100 billion RMB. In the future, China Mobile will emphasize more on product innovation and customer services to reinforce its leading position in China’s mobile payment industry.

According to data released by the People’s Bank of China (PBOC), the interbank lending rate (weighted average interest rate) increased from 2.55% in April 2013 to 2.92% in May which will affect banking liquidity requirements. The interbank lending rate decreased from 2.77% to 2.47% in March, and it started to increase in April and May. The interbank lending rate in May is 0.42% higher year on year. The total interbank lending turnover was 21.85 trillion yuan, and the daily turnover reached 993 billion yuan.

Based on CSRC’s data, about 268 firms queuing for IPO in A-share markets chose to quit the IPO process up until 31 May, 2013. 109 of these firms are supported by local VCs and PEs, which take about 41% of the total number of the firms who applied for IPOs in A-share markets. About RMB 8.45 bn investments from local VCs and PEs are locked into these pre-IPO firms, which is challenging for the VC and PE firms who might have been expecting an exit.

The tough supervision of the CSRC is one of the main reasons pre-IPO firms have left the process and only very few meet the standards and of those who did, the worry is that many have cooperated with local stock investment institutions to fake their financial performances to get them listed.

From the data released by People’s Bank of China for the first quarter 2013, the transaction volume of bankcards has reached to 100.27 trillion RMB, which is a 7.7% increase from the first quarter in 2012. The accumulated credit card issuance reached 343 million, which gives a credit card holding per capita is 0.26.

According to PBOC, at the end of 2013 Q1, China’s bankcard consumption transaction volume and value rose rapidly by 44% and 60%, respectively. Interbank transactions made up the majority of total transaction volume and value – accounting for 56% and 77%, respectively. At the end of 2013 Q1, the total circulation of bankcard in China reached 3.6 billion, increasing by 19% year-on-year, with 3.3 billion debit cards and 343 million credit cards. The average bankcard consumption per person increased by 60% to 4900 RMB.

A few weeks ago, we looked at the growth of wealth management in China – a big aspect of wealth management is the Trust industry, which we look at today.

Across multiple metrics, the Chinese futures market grew rapidly from 2006 to 2012. Total assets have grown by 6.5 times over the 6 years, net assets 7 fold and net profit growth by nearly 22 times in 2012 compared to 2006. So it is quite clear that Chinese futures industry is growing at a high speed during the past few years and it is highly likely to expand even faster due to the opening up of the markets.

Based on data released from the PBOC, bank card issuance in Q1 has increased 4.5% compared to 2012 Q4 to reach a total of 3.69 billion cards issued. Within the issued 3.69 billion cards, the total number of debit cards issued was 3.65 billion and total credit card issuance reached to 0.34 billion. From Q1 2012, the issued bank cards have had a steady growing trend which indicates that bank cards have becoming more and more Important as a payment method in China. Domestically, 10.6 billion bank card transactions happened in Q1 2013, and the total transaction value was 100.27 trillion yuan which increased 23.9% and 19.3% compared to Q1 2012.

According to iResearch, the total transaction value of China’s 3rd party online payment in 2013 Q, for the first time, declined slightly from last quarter’s 1,065 billion to 1,018 billion, -4.4% quarter-on-quarter. After the staggering growth over the last ten years, China’s 3rd party online payment market has entered a more mature stage of development. This dip largely resulted from the increasing commoditized and homogenous products and services – 3rd party players need more innovative products to improve their services and boost their revenue in the future.

Alipay is still the biggest 3rd party player, accounting for 48% market share, followed by China UnionPay with 20% market share.