The Battle of the QR Codes

Issue No. 5， 2017 Caixin Weekly

“Its really inspiring， and will change the future，” said Ding Linrun， general manager of the Product & Innovation Department of China Unionpay. What Ding is talking about is the QR code that has changed payment habits amongst Chinese people over the last couple of years– moving from cash and bank cards to smart phones.

With smart phones， people can pay for fruit， cab fees or even hospital bills just by scanning QR codes. In cities with good Internet coverage， one rarely thinks of bringing a wallet when going out.

Now the mobile payment penetration rate has reached 64.7 percent of the population， making China the biggest market in this regard. Of the three major mobile payment methods – Unionpay cards， NFC （Near Field Communication）， and QR codes – the last one is sweeping the market.

The QR code， or quick response code， is not new. When applied to payments， the codes allow smart phones and other mobile devices to scan trading information and then switch to an online payment process automatically.

QR codes have overtaken offline payment methods. These simple， low-cost， intuitive codes have successfully bypassed the hardware problems of mobile payments.

The use of QR codes and smartphone payments had become ubiquitous by the end of 2016， involving the entire retail chain. The paramount status of China Unionpay in the payment industry has been seriously challenged by rising Internet giants.

Internet companies， with their mature technological platforms and systematic ecology， have joined forces with thousands of QR code service providers to dominate a market of more than 20 million offline merchants. So far Alipay and WeChat Pay are monopolizing the QR code payment market.

However， insiders mostly regard QR codes as a transient mode– in the near future there will probably be no actual physical payment action and currency flow during trading. A salient example is Amazon Retail which launched at the end of 2016. In the bricks-and-mortar store， shoppers can pick up their books and leave while the backstage system automatically locks customers into their accounts by facial recognition and deducts the payments automatically.

But for now all players have to up their game in the battle of the QR code payments. Only the winners will make it to the next round.

New Era for Venture Capital

Issue No. 3， 2017

China Financial Weekly

Chinese venture capital investment， which started in the 1980s， has long followed in the steps of its foreign counterparts. When the third technology wave （represented by the Internet industry） flooded China， foreign venture capitalists took a large slice of the market while boosting the Internet industry in China.

Since the 1990s the Chinese economy has boomed， during which a large quantity of high-quality investment bets have emerged. At the same time， the SMEs （small and medium-sized enterprises） board and GEM（growth enterprises market） have been launched， and improvements have been made to relevant policies and frameworks. All these have promoted the rapid growth of Chinese venture capital.

The value of Chinese venture companies has soared since 2014. It stood at RMB 390 million in 2015， compared with RMB 102 million of foreign-owned companies during the same period.

In September 2016 the Chinese government unveiled a 10-clause policy promoting start-ups and entrepreneurship. The document also made it clear that China would nurture a group of domestic venture brands with international influence and competitiveness. To this end， Chinese venture companies are striving to maximize their operational efficiency， improving services and the environment， so as to avoid homogeneous competition.

A Second Child

Issue No. 3， 2017 Insight China

China adopted its universal two-child policy on January 1， 2016， posing a difficult question for many families. One major concern is the medical and educational pressure brought about by the policy adjustment.

Yang Ge， associate research fellow at the Chinese Academy of Social Sciences， suggests the government should optimize the allocation of public resources， prolong maternity leave， protect working mothersrights and benefits， and improve the child welfare system and childcare facilities. He is also encouraging employers， the market， and government to share the responsibility of parental support.

In the 21st century， concerns about over-population have gradually been replaced by worries about the declining birth rate. In 2016， the twochild policy spurred the growth of relative industries such as maternity and baby products， real estate， and automobiles， while also causing overcrowding in hospitals. Some experts have claimed that it is in 2017 that we will see how far and how deep the influence of the new policy stretches.

Internet Plus Literature

Issue No. 4， 2017 Oriental Outlook

Since the first online novel was published in China in 1998， online literature has experienced a remarkable development. Special literature websites have emerged and evolved features distinct from common portals， which enable them to gather together written works and authors， and incorporate literature and business models.

In the last couple of years， the number of online readers of literature has soared， thanks to the popularity of smart phones. As of June 2016， the number of Chinas 4G users passed 714 million， up 118 percent year on year. On the other hand， in the context of“Internet plus，” network literature works have shifted from online to offline， involved in mass entertainment industry， thus fueling a cultural industry.

The influx of capital has also driven network literature to prosper by embracing economic norms， extending to drama and the film industry， and by extension of the intellectual property business. All in all， the industry has developed into a more mature and complete business operation. In this sense， network literature is entering a“golden age.”

Constructing National Insurance Innovation Experimental Zone

Issue No.3， 2017 China Finance

For a long time Zhejiang Province has been a pioneer in Chinas financial reform. In June 2016 the State Council gave approval for the east coast province to establish the national insurance innovation comprehensive experimental zone in Ningbo City.

Che Jun， its governor， reaffirmed the irreplaceable role of the insurance industry in boosting the economy and making society stable. Since the reform and opening-up policy was rolled out in the late 1970s， Zhejiang has undergone rapid economic growth， which has also boosted the insurance business. The experimental zone is regarded as an endorsement of Zhejiangs leading role in insurance innovation， and will further promote development in this field.

Insurance is able to provide risk guarantees for， in particular， SMEs， and whats more， leverage resources to help enterprises raise funds， enter the global market， and improve the capacity of green development.

As many administrative and public functions are handed over to the market， the insurance industry is one of the key mechanisms to undertake such functions as guaranteeing livelihoods， pension insurance， and healthcare insurance.