During the Internet Security Summit in Beijing on August 21st, Ant Financial announced the official upgrade for the security control of its digital payment platform – Alipay. The more secured process is achieved through what is called a 'Delayed Payment' (DP) function.

One morning in July, investors of Niubanjin Finance, a P2P platform with balance of 39 billion RMB at that time, tried to check their balance online, but only saw a system maintenance notification. They started feeling anxious and visited the local office in Hangzhou, only to find that the office had closed, and two policemen there to record their investment information, as proof of victims.

More and more Chinese individuals have accumulated a great amount of wealth thanks to the country’s economy boom in the past decades. As a result, the demand of wealth management is growing. With the help of new technologies, mobile wealth management (MWM) platforms are attracting more and more investors in China recently.

Fortune released the latest Global Top 500 list recently. 120 Chinese companies made the list, while US took the lead with 126 companies. Banking was the leading industry in China as China's banks come to the forefront again.

President Trump’s latest controversial policy of imposing tariffs on the EU, Canada and China has shook global trade. With around $34bn worth of tariffs on Chinese goods (with more tariffs proposed), he aims to reduce the US’s trade deficit with the hope that American consumers will buy less Chinese goods and more American goods, thus increasing net exports and GDP. However, China has retaliated with its own tariffs against the US (worth the same amount). It is clear that neither side wants to back down first so who will win this trade war?

The 20th China-EU high summit was held in Beijing this past week and attracted a lot of attention due to the current global trade tensions. As the speculation on trade war continues, the EU and China decided to stand together against Trump’s attack on the global trade system.

We have talked about the trend before, but starting to see more and more cooperation between fintech companies and banks. China Construction Bank Wenzhou Branch is now in cooperation with Alipay for a hospital payment service channel, ICBC is supporting WeChat’s QR code payment and JD finance and Citic Bank have issued over 2 million co-branded credit cards called the ‘White Card’. We're also starting to better understand the potential business models for both sides.

China's tech giants are increasingly focused on positioning themselves as technology providers rather than financial services providers. A recent 3-second blockchain remittance from Hong Kong to the Philippines, was supported by Alipay HK and Philippine's GCash, cleared by Standard Chartered. Caifu Hao, a wealth management platform launched by Ant Financial, opened their AI-functioned investment tools to fund companies. Tencent recently signed contracts with a few banks to provide a financial cloud structure for acquiring and managing growing clients.

June 25th 2018, Ant Financial launched its E-wallet cross-border remittance service based on blockchain technology. Customers using Alipay HK can transfer money in real time to another E-wallet Gcash based in the Philippines.

20 Jun 2018

The HK Virtual Bank License

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The Hong Kong Monetary Authority (HKMA) published revised ‘Guideline on Authorization of Virtual Banks’ on May 30th, 2018, opening the gateway of a new banking type – virtual bank.

Ant Financial was valued at $150 billion recently, making it the biggest unicorn globally. As it completed its most recent $10 billion financing, the company has made it clear that Ant’s future is being a tech provider to the financial industry. 

On May 9th, a mini-app on WeChat called ‘Little Agreement’ showed up, providing an interface to create agreements on the Ethereum blockchain for Wechat Users. A few hours later, the mini-app was removed.

Cryptocurrency control in China seems to be getting stronger since the ban on September 4th, 2017. In a bid to further limit the use of crypto in China, the National Committee of Experts on Internet Financial Security Technology (IFCERT) is now monitoring 56 platforms that offer over the counter (OTC) cryptocurrency transactions.

The (Qingdao) Blockchain Research Company released a set of ratings for various blockchain projects on May 17th, 2018. The company is related to China Center for Information Industry Development (CCID), led by Ministry of Industry and Information Technology (MIIT), part of the national government, but it would be wrong to read that this is any sort of acceptance of crypto by the Chinese government.

Blockchain technology has become one of the most popular topics in China today as it moves beyond conversations in the tech industry to normal individuals in their everyday lives. It is easy to catch a conversation about ideas of blockchain at a restaurant, on a bus, or in a club from people excited about the investment opportunities of blockchain projects, or even just blockchain ideas.

On April 29th, the CSRC (China Security Regulatory Committee) officially released the Administrative Measures for Foreign-Invested Securities Companies.

China's banks have lost significant market share to fintech companies like Ant Finance and Tencent, especially in the mobile payment space, which the fintech companies have used as a basis to move into other market segments such as online lending. Banks have been distanced from consumers and there are concerns that people do not need banks any more. Are things really that bad?

On April 7th, 2018, Alibaba announced an investment of 4.5 billion RMB (7.1 bn USD) to Huitongda, showing the intention to develop business in the rural areas of China. They will cooperate on supply source, logistics, technology and life services.

On Feburary 22nd, the Credit Union, also known by its official name “Baihang Credit”, has finally received its business license from the government which is also the first individual credit checking license.

Blockchain technology's momentum has grown significantly in China and it’s clear that this technology is here to stay. Since Chinese New Year, frequent good news has accelerated this trend – The People’s Daily published a whole page talking about how to develop this technology, and it’s been a hot topic even in the ongoing “two sessions” National Party Congress.

The top three tech giants in China -  Baidu, Alibaba and Tencent, previously did not talk much about their blockchain development, but with a much more receptive public and regulatory environment, they have revealed a bit more about where they have been focused.

China's recent outbound M&A has been suffering with more and more acquisitions failing due to national security concerns, Ant Financial's missed acquisition of MoneyGram being the latest. Why does national security factor into these decisions and why will it remain a crucial consideration in the future?

In 2017, the Chinese smartphone market saw its first ever decline, with -4% YoY growth in smartphone shipments and -4.9% YoY growth in smartphone sales.

China is on the verge of creating another uninviting barrier for the cryptocurrency market, however nothing has been set in stone yet. Xinhua, one of the main news outlets in China, released another elusive yet pressing statement on February 5, 2018 laying out some of the government's plans to further hinder Chinese citizens from accessing international cryptocurrency exchanges and ICOs.

On February 1st, Alibaba and Ant Finance jointly announced that, according to their strategic agreement signed in 2014, Alibaba will acquire 33% of Ant Finance’s shares through one of Alibaba’s subsidiaries.

Bitcoin has grown rapidly in 2017 and its grabbed the attention of industry leaders and CEO’s, including Facebook founder Mark Zuckerberg. In January, Zuckerberg released a comment that indicated that Facebook will be looking to research and potentially adapt Blockchain technology.

In China, bar code payments (including QR codes) dominate the mobile payment market. Using a bar code to pay is easy, but comes with risks. In 2017, about RMB 90 million ($14 million) was stolen due to fraud. On December 25th, 2017, the People’s Bank of China (the PBOC) released new regulation to standardize bar code payments. The regulation will come into effect from April 1st, 2018.

XRP has become one of the most hyped cryptocurrencies, outperforming both Bitcoin and Ethereum last year. Much of the hype comes from XRP’s connection to its creator company Ripple Labs, but this link may not be as useful as many hope.

The recent hype around Bitcoin continues to bring uncertainty to the financial stability of countries. Whilst some countries are accepting Bitcoin others are rejecting it and the threats that they perceive it holds.

Evident concern on the volatility and the unforeseeable future of cryptocurrency exchanges have caused the South Korean government to take heightened steps to further inspect new crypto-trading accounts due to an “overheated market” and a number of money-laundering cases. The announcement of this act alone was followed by a downward spiral of 11% in Bitcoin's value.

China has long seemingly been opposed to all things crypto, having previously banned ICO’s and virtual currency trading. However, in the latest development of China’s war on crypto, it is now reportedly set to shut the Bitcoin mining industry.

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