Chinese search giant Baidu, Inc. announced on Monday that it would launch a new wealth management platform called Baifa on October 28. The platform will allow individual investors to make deposits as small as RMB 1 ($0.16) and earn annual returns of up to 8 percent, according to Netease News.
That 8 percent guarantee has riled the China Securities Regulatory Commission, which said today that Baidu’s promise is not in compliance with Chinese laws. In response, the head of Baidu Finance withdrew all statements related to principals or guaranteed yields.
Baidu’s move to open a wealth management site puts it in direct competition with Alibaba Group, which launched its own wealth management platform in June. The service, called Yuebao, offers its customers interest rates of 6 percent, more than most Chinese banks. In its first 18 days on the market, Yuebao gained 18 million registered users and $1.07 billion in deposits.