Yu'E Bao, with its attractive interest rates, drew more than 81 million users by March.
Chinese President Xi Jinping took office more than a year ago amid high hopes for economic reform. State banks seemed to be a priority, raising expectations among domestic and international observers that new regulations would increase returns for savers and encourage consumer demand. However, there has been little action on this front, raising doubts about the administration's sincerity, and its ability to overcome vested interests.
With the emergence of new online financial markets, however, China's reformers have found private companies able to shake up the country's mighty financial institutions. In an apparent rebuttal of calls from state banks to ban or tightly regulate rapidly growing online investment markets, they ruled out a ban and praised Internet finance as a force for reform. Established state banks are trying to stop these new services.
