China takes a swipe at the fintech sector
By Elliot Wilson
It is no secret that China’s fintech sector has seen spectacular growth.
Alibaba and Tencent, while still mostly domestic in focus, are already global names in their own right: Hong Kong-listed Tencent had a market cap of $495 billion by the middle of May, while New York-listed Alibaba was only $2 billion behind. Only five companies – Alphabet, Amazon, Microsoft, Facebook and Apple – all US-based, are more valuable.
These two Chinese firms are the respective owners of Alipay and WeChat Pay, the country’s most profitable digital payments services, and are just the tip of the spear. Of the world’s 27 fintech ‘unicorns’, or firms with valuations above $1 billion, nine are Chinese, according to TechCrunch.
Barely a week seems to pass without a fintech outfit from the mainland announcing its intention to go public. In March, three such companies filed listing documents with the Hong Kong securities regulator. In April, Weidai, a micro-lender based like Alibaba in Hangzhou, said it planned to raise $400 million in an IPO in the second quarter, also in Hong Kong.
The allure of investing in one of these bright young things is easy to explain. Beijing has spent the last several years tacitly encouraging entrepreneurs to find new ways to disrupt its financial sector, simply by sitting back and doing nothing.
Photo courtesy of uditha wickramanayaka.