Five Examples of China’s Fintech Strength

By Sara Hsu and Jianjun Li


China has emerged as a leader in the global fintech industry, but there has been limited insight into this development. This book provides a wonderful summary of China’s fintech development, covering topics such as digital payment systems, peer-to-peer lending, and online consumer credit.

~Bohui Zhang, executive associate dean and presidential chair professor, Chinese University of Hong Kong, Shenzhen

Today’s Academy of Management virtual exhibit feature is China’s Fintech Explosion: Disruption, Innovation, and Survival  by Sara Hsu and Jianjun Li. This book explores the transformative potential of China’s financial technology industry, describing the risks and rewards for participants as well as the impact on consumers. In today’s post, the authors offer examples of China’s fintech strength.

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Unlike in Western nations, fintech in China helps compensate for an underdeveloped financial sector that has been unable to accommodate all consumers and firms that demand financing. Fintech firms have rushed to assist a broad swath of consumers and small firms with little to no bank credit history and high levels of demand. This is apparent in several sectors, revealing China’s fintech strength.

  1. Digital payments allow customers to make payments over the internet, and in China, most of this is carried out using mobile phones. China has 502 million unique mobile payment users. The two major competitors, Alipay and WeChat pay, hold 92 percent of this industry’s market share.
  2. China’s online lending volume went from US$3.3 billion in 2012 to $41.1 billion in 2014—more than the United States ($10.4 billion) and the United Kingdom ($2.4 billion)—to RMB 2804.8 billion ($420 billion) in 2017. Total investors and borrowers in 2013 were numbered at 400,000 and exploded to 40 million by 2017.
  3. Credit card use is on the rise, from 5 million in 2002 to 300 million in 2017, and virtual credit cards allow consumers to purchase goods using credit instead of cash. New fintech companies are being established to improve credit card risk management.
  4. Less wealthy online investors can now use robo-advisors to understand where to place and grow their savings. Assets in online products now compose about 35 percent of China’s investment market.
  5. There were over 430 blockchain companies in China in 2017, mainly used in the real economy and financial sectors. There are also 930 blockchain-related apps in China. These were applied to various activities, including mining, currency trading, infrastructure, platform technology, and related services.

China’s fintech firms have posed strong competition to traditional banks, which have had to adopt fintech channels in order to meet consumer demand and keep pace with new technologies. These innovative technologies, including artificial intelligence, blockchain, cloud computing, big data, and 5G, have allowed fintech firms to assess the credit history of small borrowers, provide rapid financial services to customers across the nation, and reduce overall risks in the financial sector.


For the duration of what would have been the conference weekend, you can use the code AOM20 at checkout from our website for a 20 percent discount on any of our conference titles.

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