The good and the bad among P2P platforms - Sara Hsu

Sara Hsu

P2P service Yirendai tries to move up in the financial food chain by turning to wealth management. Most P2P platforms are not able to do so, says financial analyst Sara Hsu to the South China Morning Post. But Yirendai could be the exception, she adds.

The South China Morning Post:

“Most Chinese P2P companies are ill-equipped to expand into other financial services such as wealth management services,” said Sara Hsu associate professor at the State University of New York. 

“However Creditease and its subsidiary Yirendai are better positioned to expand into other areas since they have very carefully developed, strong risk control practises already in place,” said Hsu. 

“Similar to other large e-commerce players in China, such as Alibaba and Tencent, Creditease collects large amounts of data that it uses to analyse customer credit worthiness.” 

Of course, wealth management is quickly turning into one of the most competitive areas of China’s finance industry, so as well as larger P2Ps, a number of other investment platforms, challenger banks, and international private banks are already targeting this space, as well as China’s traditional banks.

More in the South China Morning Post.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more fintech experts at the China Speakers Bureau? Do check out this list.  

Wealth management tools circumvented banking restrictions - Arthur Kroeber

Arthur Kroeber

While China´s financial regulators have tried to prevent previous market panics, smaller banks have behind their backs been expanding credit lines to wealthy clients, says economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know®  to Dow Jones. The regulators now try to rein in those tools.

Dow Jones:

The growth of the sector has put regulators in a tricky situation. On the one hand, the credit generated by the products has helped some struggling companies get by. On the other hand, the growth of essentially off-balance sheet lending masks the extent of problematic loans in China's banking system. 

"A part of what is going on right now in China is that the banks, particularly the smaller banks, have expanded their balance sheets very rapidly, and the regulators are worried about this," said Arthur Kroeber, a partner at the China- focused Gavekal Dragonomics research firm. 

The document appears to target the risks related to wealth-management products that invest in stocks and other riskier assets, more than ones that concentrate on more-traditional assets such as loans to companies.

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more financial experts at the China Speakers Bureau? Do check out this list.

Mega trends for change in the next decade - Wang Haiyan

Wang Haiyan

More globalization and technology is going to drive mega change in the coming decade, tells Wang Haiyan, managing partner of the China India Institute, a Washington, D.C.-based research and advisory organization, at Wealth Management. "And global market shocks from China, like the one we saw last summer, will only increase."

Wealth Management:

Financial services professionals have got to pay attention to what’s happening globally. Developments in the emerging market economies, for example, now account for one-third to 40 percent of the variation between stock market returns and exchange rate fluctuations worldwide, Wang said. 

And global market shocks from China, like the one we saw last summer, will only increase, she warns. A 1 percentage slowdown in Chinese growth translates into a 0.3 percentage point decline for other Asian countries. 

Global restructuring is another big change advisors ought to pay attention to. Emerging Asia is growing at three times the rate of developed nations. Three-fourths of the global growth is still driven by emerging markets. 

Developed nations and emerging markets have divergent demographics. The median age in Japan, Germany, France and the U.S. is 38 years or older. Meanwhile, the median age in Brazil is 31.3; in India it’s 26.6, and in Africa it’s 19.4 years. 

These trends are not going to reverse, Wang argued. The emerging markets are seeing growing literacy and growing connectivity. Before, poor infrastructure in these countries was a barrier. Thanks to broadband Internet, a child in a remote village can become educated. 

But the emerging markets also have diverging futures, she said. China and India are expected to grow at a rate of 6 percent and 7.8 percent in 2021, respectively. That compares to estimated growth in 2021 of 1.5 percent and 2 percent for Russia and Brazil, respectively. These countries are still climbing out of recessions. 

Asia is moving to the world’s center; by 2025 Asia’s GDP will be larger than the US and Europe combined. Some financial institutions, however, are retreating from Asia. Given that, Wang says the industry should think about what kind of footprint it should have in Asia.

More at Wealth Management.

Wang Haiyan is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more financial experts at the China Speakers Bureau? Do check out this list.  

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