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Reuters/Shu Zhang
Too much of a good thing?

China’s gargantuan money market fund is a sign of strength—and deep imbalances

When Ant Financial added a money market fund to its payment app, few people expected it to become the biggest in the world a couple of years later. Its runaway success is a sign of China’s financial potential, as well as a deep and worrisome imbalance within its $13 trillion economy.

First, the good news. Just six years after it was launched, some 588 million Chinese—more than one-third of the country—access the fund through Alipay, the ubiquitous payment app that is part of Ant Financial, an affiliate of e-commerce giant Alibaba. Even after shrinking to its lowest level since 2016, it’s still the biggest money market fund in the world, overseeing the equivalent of about $148 billion in assets, as of March 31.

The fund is called Yu’e Bao, meaning “leftover treasure,” and was launched by Tianhong Asset Management, which is 51% owned by Ant. (The fund’s proper title is Tianhong Yu’e Bao, which is an individual fund on Alipay’s overall Yu’e Bao wealth management platform.)

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