The companies have recently entered the wealth management services market, signing up millions of Chinese attracted by higher interest rates than banks are allowed to offer, which are subject to a cap of 3.3% for one-year savings.
Official control of interest rates has left commercial banks offering slim profits for individual depositors, with yields of most savings products barely matching inflation. That is changing as the government liberalizes interest rates and as online savings products compete with higher returns.
Ecommerce provider Alibaba prompted China’s online finance industry with the Yu’e Bao money market fund, accounted for USD 65.38 billion in assets under management, according to the official Shanghai Securities News.
Baidu and social networker Tencent followed lawsuit, drawing the indignation of China’s banks who are lobbying to introduce curbs on the growth of online funds offered by non-banks.
Baidu provides a range of services including a Chinese language search engine for websites, audio files and images. The company offers 57 search and community services including Baidu Baike, an online collaboratively-built encyclopedia and a searchable keyword-based discussion forum.
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