Change or Die.docVIP

Change or Die 　　there once was a time when online financial products offered by Internet companies were viewed as formidable enemies by Chinese banks. Now， it’s time for banks to lie back and breathe a sigh of relief. 　　The crown of Internet finance pioneers such as Alibaba is now slipping. Return on Internet financial products have been dropping for several consecutive months， triggering concerns over their investment value and raising the question of whether they will vanish from the market. 　　 losing luster 　　The flagship online investment product offered by China’s Internet companies―Yu’ebao（literally meaning “leftover treasure”）―was launched by China’s e-commerce leader Alibaba Group and Tianhong Asset Management Co. Ltd. at the end of May 2013. The instrument allows users to convert spare cash into a money market fund holding. 　　yu’ebao instantly created a splash and became China’s biggest online investment service. The reasons why users chose yu’ebao over traditional investment options included a much higher yield than the government-mandated deposit rate， the lack of a minimum deposit requirement and the ability to transfer and withdraw funds easily and quickly without paying commission. 　　According to Tianhong Asset Management Co. Ltd.， as of May 26， yu’ebao had over 100 million users with a total of investment of 574.2 billion yuan （$92 billion）， making it the largest money market fund in China and the fourth largest in the world. 　　The good times， however， didn’t last long. In fact， the return rate of yu’ebao has been on a steady decline since January， when the annualized seven-day interest rate reached its highest level of 6.76 percent. On July 23， that rate was only 4.18 percent. Analysts predict it will decline to less than 4 percent in August. The benchmark one-year bank deposit rate is 3 percent. 　　“In the long term， the interest rate of yu’ebao will stabilize at around 3-4 percent，” said yi Huanhuan， deputy head of the research institute