Sieren’s China: Cashless into the Year of the Monkey

More and more Chinese citizens are giving their New Year monetary gifts through digital means. This is not considered heartless but cool. So cool that even the Communist Party is doing it, says DW’s Frank Sieren.
Chinesisches Neujahrsfest Liu Xiao Ling Tong Monkey King New York
The highlight of every Chinese New Year meal with the family is when the “hongbao”, red envelopes filled with brand new banknotes, are handed out at the end. The tradition goes back to the Qin dynasty (221 – 206 BC) when hongbao were given to children to protect them from evil spirits. It has since become common to give them not only to children, but also to older relatives, friends and even colleagues. Companies give their employees annual bonuses in red envelopes. It is bad form to turn up at a family dinner without one.

Chinesisches Neujahrsfest Liu Xiao Ling Tong Monkey King New York

This year, the Year of the Monkey, which began on February 8, is no exception. However, instead of having to meet people in person to give them their monetary gifts, it is becoming increasingly popular to give red envelopes digitally. This is not considered heartless, but actually very cool.

Passwords from presidential speech

Even the Communist Party has started giving e-hongbao to gain popularity among members. In the three days before the new year began, some 300,000 yuan (41,000 euros) were transferred via the WeChat messaging app by the “Communist Party Member” account.
To access the money, party members had to be well versed in the speeches of President Xi Jinping. The passwords needed to open the virtual red envelopes were gleaned from expressions that the president used in his new year speech. So far, 100,000 users have read the message and over 10,000 have “liked” it, but if the experiment is to be considered successful it has to reach half of China’s 80 million party members.

This initial trial will likely be expanded next year.

Transferring money in this way has not been possible for that long. Tencent, one of China’s leading tech giants, only developed its app two years ago. However, the method is popular because it is easy to use and also has a playful element. The person giving a monetary gift decides on a sum that can be divided amongst a group of people. It’s the person who opens the envelope first who gets the most money – he or she might get 50 yuan, while the slowest could end up with only 10 or just five yuan.

Digital ‘red envelopes’ worth millions

The game is not only played in China. This year on New York City’s Times Square, WeChat users had the chance to win e-hongbao by shaking their smartphones in front of digital billboards at certain times when Tencent ran a lucky money promotion.

As digital monetary gifts become increasingly popular, rival tech companies are trying to increase their hold on the market. With 400 million users, WeChat is well ahead of Alipay – China’s equivalent of PayPal. The Communist Party chose to send its hongbao via Alipay, so that the gap did not widen further. Moreover, Alipay was allowed to join hands with China Central Television (CCTV) to hand out red envelopes worth 800 million yuan (109 million euros) to viewers.

The annual New Year gala is the most-watched TV program in China. China’s Internet companies predict that 10 billion yuan (1.36 billion euros) will be spent on e-hongbao in the coming days. For Tencent, the WeChat hongbao is a way of obtaining new users and gaining a larger share of the rapidly expanding online payment market.

It also suits the government because the hongbao is effectively a massive private social program with money being transferred from the richer to the poorer – all over the country – from the coast to the far west.

Posted by on February 14, 2016. Filed under World. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.