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.

Happy year of the Ram from the entire team at Kapronasia!

We'll be taking a few days off, but will be back in the office next week. 

One of the latest ads from Huawei, the large Chinese manufacturer of networking equipment, is a rather disturbing wrapped up ballerina's foot. While the idea is good, the advertisement shows that there's still a gap in understanding between tech and the consumer. 

China’s capital markets are maturing. Futures and margin trading had already been launched, but this week we saw equity options for the first time in China. The new derivatives trading commenced with big fanfare, with main regulators as well as top government officials present at the opening ceremony, emphasizing the importance of the event.

2014 was a good year to be a bank in China, but apparently an even better one to be a brokerage. The latest data from the Securities Association of China shows that 2014 total income for the industry was 260.3 billion RMB (Chinese Yuan), up 63% from 2013.

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. 

The Singapore Exchange (SGX) has plans to launch a FTSE China A50 Index Futures option product if / when it is approved by the China Securities Regulatory Commission (CSRC). While the new product name can be confusing for those who don’t follow Asian stock and derivatives markets closely, it simply means that investors in the region will have a hedging tool for the rollercoaster stock markets of China. Up more than 40% since November last year, the stock market dipped several times in January. Since the Shanghai-Hong Kong Stock Connect launched, the attention on Chinese A-shares has been unprecedented and additional investor interest should drive demand for exposure and hedging tools.

The total number of payments licenses currently stands at 269. Most of the licensed companies are private and do not disclose their financials, however, some publicly listed corporations have invested in the payment industry and a peek into their most recent annual reports allows us to know a bit more about the profitability of the payments industry in China. On one end of the spectrum, Alipay dominates the market and is very profitable. On the other, a prepaid-card company almost went bankrupt in January, which begs the question of how the industry is doing as a whole.

The explosion in margin lending has fueled a baseless rally in the Shanghai Composite, but the magnitude of leverage in the stock market is still coming to light.

A bit outside of our normal commentary, but an article sheds light on how low-latency technology is important in China, but for buying train tickets.