(ECNS) -- What is the most-talked-about topic in China? There is no doubt it is something related to Internet finance, in particular the online P2P lending industry.
Since 2014, this industry has seen dramatic development, exhibiting a trend of "barbarian growth."
According to statistics, in 2015 alone, network lending nearly reached 1 trillion yuan ($152.7 billion), almost three times that in 2014. As an increasing number of platforms go wrong, especially after the Ezubao accident broke out last year and caused a national sensation, subtle changes have taken place in the P2P industry after a growth spurt. It is believed that an industry reshuffle is inevitable during 2016. In this light, which platforms can survive the cold wave?
Hao Jianming, Chairman and CEO of Wins Finance Holdings Inc. (Nasdaq: WINS) did his best to answer the above question.
The tougher external environment provides more exciting opportunities for enterprises to develop
Related data show that China has more than 3,600 P2P platforms currently. It is true that intensified competition, moral hazard and credit risk have stepped up the P2P industry shuffle. In addition, increasingly stringent regulatory policies have ratcheted up the cost spent on attraction of new customers and normal operations. What's worse, as those responsible for some platforms are on the run, and some platforms go bust and have difficulty in cashing-in, the popularity of P2P platforms has suffered a sharp decrease. In consequence, investors have become more rational. With regard to the current environment, Hao Jianming believes: "The current development environment, though seemingly severe, will prove to be a boon to enterprises. The approaching severe winter will create better development opportunities for enterprises, the process of which is an analogy to gold and sand. Survival of the fittest will lead to the advance of times. For enterprises, it is opportune to make breakthroughs and grow stronger during this period. Good corporate governance is undoubtedly a key factor for them to realize substantial change."
Innovation in Internet finance will help SMEs achieve leapfrog development
China's SMEs are often confronted with a common predicament where they find it difficult to continue growth beyond a certain stage. Take the current P2P industry for example. Faced with changes in management, capital, policies, environment and other factors, some SMEs have gone bankrupt before they got an opportunity for further development, which leaves many enterprises frustrated at the difficulty in establishing a business.
Hao Jianming says: "When a company gets in trouble, and has nothing to do but wait, M&A is a good solution to realize synergy and common development. During this process, the corporate management concept of rebuilding the systems and related procedures is a catalyst. The successful M&A is based on the ability of value discovery and value creation. During M&A, identifying the potential value of a company through overall evaluation is necessary. Corporate value can be realized through management integration, which means corporate value can be created through management integration."
Attract overseas strategic investment to help enterprises make breakthroughs
In 2015, the state introduced its "One Belt and One Road" strategy, encouraging many enterprises to go global. In early 2016, foreign investment projects run by Alibaba and overseas investment by Wanda Group drew the attention of many industry professionals and media. Moves by these bigwigs to expand overseas have undoubtedly sped up the process of internationalization among Chinese enterprises, which is of great significance to Chinese economic development. Hao Jianming, boasting many years of experience in overseas investment, said: "In the face of fierce international competition, we have to move forward and continue to make breakthroughs in order to ensure both our nation and people become wealthy. Based on years of understanding of the U.S. market, I will continue to ramp up investment in the States, including investment in a wealth management company that lures the capital of wealthy Chinese to the U.S."
