New | Fangs are out after Chinese broadcaster's 'vampire' slur on online funds

A war of words has erupted among Chinese financial commentators after a senior editor of state broadcaster China Central Television slammed online financial investment services and called for an outright ban.

“They profit from raising economic costs for the entire society,” Niu wrote on Friday, referring to interest rates offered by such services markedly exceeding those offered by traditional bank deposits.

Online wealth management services have become extremely popular since Alibaba, China’s largest e-commerce company, began offering its Yuebao online-only investment service in June last year, as returns on online deposits can exceed ten times those offered by traditional banks.

Niu however warned that such funds could erode the traditional banking sector’s liquidity by luring savers away from banks and, by inflating interest rates, increase the cost for businesses to borrow money.

Yuebao “is a serious threat to China’s financial security and economic security,” he concluded.