ABSTRACT
P2P has incredible potential to remake the way fi nance is done in China if it is done right. As the Internet reaches more of the population, accumulated data on consumers and businesses improve risk modeling, regulation helps control risks, and the platforms themselves improve, Chinese households and businesses will fi nd themselves with many more attractive choices for investment and borrowing. That is not to say that this is right around the corner or that the route is not fraught with risk. The market today is untested by economic downturns, regulatory compliance, and large scandals. In fact, there is a consensus among experts the author interviewed for this report that the majority of platforms are likely to fail in the coming years, especially with coming regulation that will challenge many currently profi table business models and reduce regulatory arbitrage.
