News / Asia

    China Sees Big Shift Into Online Finance

    Employee seen behind glass door of Alibaba's company headquarters on the outskirts of Hangzhou, Zhejiang province, April 23, 2014.
    Employee seen behind glass door of Alibaba's company headquarters on the outskirts of Hangzhou, Zhejiang province, April 23, 2014.
    Victor Beattie
    The International Business Times says a big financial shift is underway in China.

    It says people are increasingly depositing extra cash in online investment platforms that allow instant access to their funds with no minimum deposit while offering interest rates much higher than traditional banks.

    One of those online financial products is Yu'e Bao, a money market fund offered through e-commerce giant Alibaba's third-party payment affiliate, Alipay.com.

    Launched in June, the service offers interest rates up to 6 percent, compared to the capped 3.3 percent savings rates at major banks.

    Much like Paypal.com, it allows users to tap their accounts for online purchases.

    Emerging at a tumultuous time in China's financial sector, when traditional banks and Beijing regulators are pushing for stricter Internet finance rules, Yu'e Bao isn't the only game in town.

    Online investment platforms are also available to customers of China's massive online search company, Baidu, and Tencent, the country's largest internet company.

    With more than 618 million active internet users, China is seeing an unprecedented number of consumers conduct transactions via smartphone or tablet.

    According to IBT, Yu'e Bao investors already outnumber those in China's stock markets, causing some experts to question whether the nascent industry represents a sustainable model.

    "While online financial services are growing rapidly now, there are reasons to suspect that it is unsustainable given market forces, as well as the potential for greater regulation," said Ken DeWoskin, director of Deloitte's China Research and Insight Center.

    DeWoskin said in a VOA interview that some form of regulatory restraint, such as the amount of cash reserves online bankers would be required to keep on hand, may undercut the range of services.

    But he said e-commerce is likely to remain a growing mainland phenomenon.

    "Rent prices for traditional retail shops in major Chinese cities is so high [that] online services operating out of warehouses can easily compete because of their relatively low costs," he said.

    According to Reuters, "the total transaction value of China's third-party online payments is expected to reach nearly $3-trillion [18.5 trillion yuan] by 2017."

    Although Alibaba's financial products may be separate from the massive company's upcoming IPO, Reuters also says Alipay.com's financial platforms are likely to prove vital to the company's overall growth.

    You May Like

    Taj Mahal Battles New Threat from Insects

    Swarms of insects are proliferating in the heavily contaminated waters of the Yamuna River, which flows behind the 17th century monument

    Self-doubt, Cultural Barriers Hinder Cambodian Women in Tech

    Longtime Cambodian tech observer Sok Sikieng says that although more women have joined profession in recent years, there remain significant factors hindering women from reaching tech potential

    Trans-Adriatic Pipeline to Boost European Energy Security

    $4.5 billion-pipeline will become operational in 2020 and will deliver gas from Azerbaijan’s Shah Deniz II field to southern Italy

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Vietnamese-American Youth Optimistic About Obama's Visit to Vietnami
    X
    Elizabeth Lee
    May 22, 2016 6:04 AM
    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video Vietnamese-American Youth Optimistic About Obama's Visit to Vietnam

    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video First-generation, Afghan-American Student Sets Sights on Basketball Glory

    Their parents are immigrants to the United States. They are kids who live between two worlds -- their parents' homeland and the U.S. For many of them, they feel most "American" at school. It can be tricky balancing both worlds. In this report, produced by Beth Mendelson, Arash Arabasadi tells us about one Afghan-American student who seems to be coping -- one shot at a time.
    Video

    Video Newest US Citizens, Writing the Next Great Chapter

    While universities across the United States honor their newest graduates this Friday, many immigrants in downtown Manhattan are celebrating, too. One hundred of them, representing 31 countries across four continents, graduated as U.S. citizens, joining the ranks of 680,000 others every year in New York and cities around the country.
    Video

    Video Vietnam Sees Strong Economic Growth Despite Incomplete Reforms

    Vietnam has transformed its communist economy to become one of the world's fastest-growing nations. While the reforms are incomplete, multinational corporations see a profitable future in Vietnam and have made major investments -- as VOA's Jim Randle reports.
    Video

    Video Qatar Denies World Cup Corruption

    The head of Qatar’s organizing committee for the 2022 World Cup insists his country's bid to host the soccer tournament was completely clean, despite the corruption scandals that have rocked the sport’s governing body, FIFA. Hassan Al-Thawadi also said new laws would offer protection to migrants working on World Cup construction projects. VOA's Henry Ridgwell reports.
    Video

    Video Infrastructure Funding Puts Cambodia on Front Line of International Politics

    When leaders of the world’s seven most developed economies meet in Japan next week, demands for infrastructure investment world wide will be high on the agenda. Japanese Prime Minister Shinzo Abe’s push for “quality infrastructure investment” throughout Asia has been widely viewed as a counter to the rise of Chinese investment flooding into region.
    Video

    Video Democrats Fear Party Unity a Casualty in Clinton-Sanders Battle

    Democratic presidential front-runner Hillary Clinton claimed a narrow victory in Tuesday's Kentucky primary even as rival Bernie Sanders won in Oregon. Tensions between the two campaigns are rising, prompting fears that the party will have a difficult time unifying to face the presumptive Republican nominee, Donald Trump. VOA national correspondent Jim Malone has more from Washington.
    Video

    Video Portrait of a Transgender Marriage: Husband and Wife Navigate New Roles

    As controversy continues in North Carolina over the use of public bathrooms by transgender individuals, personal struggles with gender identity that were once secret are now coming to light. VOA’s Tina Trinh explored the ramifications for one couple as part of trans.formation, a series of stories on transgender issues.
    Video

    Video Amerikan Hero Flips Stereotype of Middle Eastern Character

    An Iranian American comedian is hoping to connect with American audiences through a film that inverts some of Hollywood's stereotypes about Middle Eastern characters. Sama Dizayee reports.
    Video

    Video Budding Young Inventors Tackle City's Problems with 3-D Printing

    Every city has problems, and local officials and politicians are often frustrated by their inability to solve them. But surprising solutions can come from unexpected places. Students in Baltimore. Maryland, took up the challenge to solve problems they identified in their city, and came up with projects and products to make a difference. VOA's June Soh has more on a digital fabrication competition primarily focused on 3-D design and printing. Carol Pearson narrates.

    Special Report

    Adrift The Invisible African Diaspora