China has been a leading name in the technologies industry with the greatest number of patents coming from the nation. Innovation in tech is a huge sector in this nation and it is only getting bigger as the need for tech innovations is rising day by day.
China’s biggest internet and information technology firms are heading into the financial-services business, in lieu of monetizing troves of data they’ve collected on millions of people in the country. Didi Chuxing, the country’s largest ride-hailing company, smartphone maker Xiaomi Corp., web-search giant Baidu Inc. and online retailer JD.com Inc. are among the major names that have set up finance arms providing personal loans, insurance and investment products stepping to the finance realm. Many of those products are offered and sold via the companies’ smartphone apps that connect directly to individuals’ virtual wallets or bank accounts. The biggest pro on the consumers side is that these companies have helped make credit more freely and easily accessible to many people, including those who don’t qualify for traditional bank loans. The interest rates on short-term loans offered by these tech companies differ based on the companies’ assessments of borrowers’ creditworthiness but are often same or similar to the rates offered by banks for unsecured loans.
By lending to individuals and providing them with other financial services, China’s tech companies are also gathering more data about their customers’ spending habits and lifestyles, which can help the companies expand their other businesses, analysts say. Yinglan Tan, chief executive of Insignia Ventures Partners, a technology venture fund, stated that More than profitability, the key motivation is expansion.