Internet a shot in the arm for financing

The rise of Internet financing has eaten into the savings of traditional banking giants. According to official data released on April 15, the savings of four State-owned banks dropped by 1.9 trillion yuan ($305.41 billion) in the first two weeks of April.

The development of the Internet has provided better information for market players. And since the Internet and the financing business both need information to run their systems, they can work in tandem.

Statistics show that in 2013, China's M2 was 103 trillion yuan ($16.58 trillion) against its GDP of 56 trillion yuan. But small and middle-sized enterprises which accounted for 70 percent of the total jobs in the country could only get less than 20 percent of the total loans issued by financial institutions. This shows that China's banking system is distorted, with the price of money not representative of its true value. This is where Internet financing can play a vital role, because it can fulfill traditional financing functions as well as create a financial world in which more people can do business.