Internet Finance Industry in China- Opportunities and Selected Issues

2015 FINTECH SEMINAR

Gao Zhifangemail: gloria.gao@fangdalaw.com

August 21, 2015

Major products and service in China

Peer-to-peer (also known as P2P) Lending

Online/Mobile Payment, Settlement, Remittance

E-commerce Financial Platform

E-commerce Micro Credit

Crowd Funding

Fund Management

Virtual Currency

Examples of foreign investment in Internet finance industryCompany Product/

serviceBrand name Description

China EdaiFinancial serviceGroup

P2P lending Edai Established in January 2009 and provides individuals and enterpriseswith corporate loans, bank loans, car loans, emergency loans, creditloans, micro loans, mortgages, unsecured loans and other services.

Beijing RongCenturyInformationLimited

Onlinefinancialsearch

Rong 360 Established in October 2011 and an internet platform providingsearch and recommendation services financing and loans for anumber of individuals and micro enterprises.

Tencent Online fundmanagement

Wechat A messaging APP similar to Line. Its wealth management productswere launched in January 2014.

Beijing GaoyangXunjieInformationTechnologyLimited

Payments,settlement andremittances

19 Pay Provides individuals with online payment services, accountmanagement services and various value-added services.

BeijingWecash Qi YiTechnologyCo., Ltd.

P2P lending Wecash Established in April 2014 and offers P2P lending by quick assessingthe credit of borrowers.

Noah WealthManagement

Co., Limited

Online wealthmanagement

Established in 2003 and listed on NYSE in November 2011 andprimarily engages in distributing financial products and servicesonline.

Credit Ease Co.,Ltd

P2P lending Yi XinBao

Established in 2006 and launched the first P2P microcredit platformin China, bridging urban lenders with extra funds and people with

microcredit needs, such as urban micro-entrepreneurs, salary workers,vocation school students and the rural poor.

P2P industry growing rapidly in China

0 3.121.2

105.8

252.8

2010 2011 2012 2013 2014

Development of P2P from 2010 to 2014Volume of Transaction (billion PRC yuan)

35.78 33.51

49.2655.15

60.9665.96

82.51

Development of P2P Industry from January to July in 2015

Volume of Transaction (billion PRC yuan)

Regulations on P2P Industry

• Intermediary of information

• No fraud, Ponzi scheme and other criminal behavior

• Detailed instructions on P2P business model

Development of P2P Business Model

P2P CompanyBorrower LenderInformation Information

Fund Fund

Guarantee Guarantee

Development of P2P Business Model

Information Information

Guarantee Guarantee

Third Party Payment Company

P2P Company LenderBorrower

Development of P2P Business Model

Information Information

Insurance Company

Guarantee Company

Third Party Payment Company

P2P Company LenderBorrower

Q ＆ A

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