China's Banking System – New Investment Platforms Raise Questions

Summary

The growth of large online investment platforms has captured the attention of Chinese authorities in recent months. Non-state enterprises such as Alibaba Group Holding Ltd., which runs the e-commerce website Taobao, and Tencent Holdings Ltd (HKG:0700), a social media conglomerate that runs the popular WeChat online messaging program, are an emerging force in China’s financial system.

China

The question is whether these online financing platforms could start to chip away at state-controlled banks’ effective monopoly over the country’s vast pool of household and corporate savings. For now, funds invested into new online financing...