中国互联网金融持续升温

China’s internet heavyweights are rushing to market their online finance products with competitive interest rates in an effort to gain new customers. Annualized rates of the online financial products can be 20 time higher than those banks provide and are posing a huge threat to traditional banking.

Top players from China’s internet world such as Alibaba, Baidu, and Tencent, are all getting their hands on online financial products now.

For example, a flexible savings account from Tencent offerred an annualised rate of 6.38 percent on February 20th. That’s about 20 times higher than the rates banks are offering on similar products.

And what’s even better is that the minimum savings requirement is just 1 yuan.

"This provides easy access to individual investors, the average account has about 4,000 yuan. This is what we call pocket money wealth management. And many young people have joined this group. We see people from 18 to 22, who are mainly students, and have taken up a quarter of the total users," said senior strategy analyst of Tian Hong Fund Liu Jiazhang.

Online financing started with Alibaba’s Yu er Bao last June. The effort attracted 80 thousand users on the first day with its 7 percent per year interest rate. Its user base expanded to 61 million, with a net-worth of 250 billion yuan, or about 40 billion US dollars, in just eight months. The success has pushed other internet giants such as Tencent, to join the game. Tencent launched its E-payment platform Tenpay at the beginning of this year.

Ma Xiaodong, director of Online Payment Centre, Tencent, said, "Our users have already exceeded a million. And our cooperation partner Huaxia fund has seen the value of its currency fund exceed 40 billion yuan. "

Analysts estimate that the online finance market is growing at an exponential rate, adding about 10 billion yuan a day to the ledgers. With saving rates in China’s banks fixed at about 3 percent and flexible rates at next to nothing, it’s not hard to see why the Chinese like their E-alternatives.