Weaning China Off Cash: There’s No Silver Bullet – Seeking Alpha: There is already a natural propensity among policy makers in the PRC to try to shoot their way out of problems with simple solutions rolled out on a massive scale. This should be discouraged – the line between “simple” and “simplistic” is a narrow one indeed, and the last thing the nation needs is intelligent outsiders encouraging this misguided approach.
Interesting article about payment systems in China. I’m inclined to agree with David Wolf’s criticality of the McKinsey suggestion, and particularly agree with the article’s overriding point: THERE IS NEVER A SILVER BULLET.
I question basically everything about the assumptions though. The economy can easily support expanding the banking infrastructure and no, cost isn’t really a specific issue. It will take about 15 years to industrialize the remaining 45% of agricultural China and the expansion of existing systems to suit that growth should work just fine. There’s no reason to make ultra cheap ATMs. If the price of the ATM is too high, just open an bank instead. Western folks tend to think of the cost of a manual process as cost prohibitive, but you’ve always got to compare it to the cost of the capital equipment.
Generally, I think most American’s commenting about China issues, particularly technology issues, are way off. Investigate for yourself before investing.