There is a saying that the only constant in life is change. The US used to value innovation. We no longer lead the world in innovation. As our deep state got larger, the sheer inertia of moving large corporations into change has caused us to protect the old instead of looking for the new. China is embracing change and rewarding innovation. Government can create a culture of innovation often by just getting out of the way.
Tech companies in China are playing an increasingly important role in the financial industry, widening their net into an ever more diverse set of services, and unless traditional banks and brick-and-mortar businesses can catch up, they are going to become increasingly irrelevant. Reform of state-owned enterprises and transformation of the old economy is going to come from the outside.
Alibaba is setting the pace for the massive disruption taking place. In the financial sector, Jack Ma’s company has already begun to tap into the boundless potential presented by Chinas’ middle class in the realm of wealth-management. The success of Yu’ebao, Alibaba subsidiary Ant Financial’s money market fund — the largest in the world — is just the tip of the iceberg. Read more here.