Institutions influencing the evolution of crowdfunding in China: A review of the world bank report on crowdfunding’s potential for the developing world

Abstract

In the recently published World Bank Report on Crowdfunding [infoDev (Crowdfunding’s Potential for the Developing World (Report). World Bank, 2013)], China has been predicted to have great potential: By 2025, Chinese households might invest up to US$50 billion per year in crowdfunding projects. However, as the authors of this report have admitted, they based their approximation primarily on economic data, and thus China’s prospective amount of crowdfunding capital may actually be much lower. Not least for international crowdfunding platforms, the development of crowdfunding in the Chinese market is of considerable importance. This paper assesses the World Bank Report’s procedural methods and their applicability to China. Moreover, it addresses some mistakes and contradictions that underlie this report. Whilst the report’s findings provide a solid insight into crowdfunding’s potential for the entire developing world, some key variables used are not applicable to China and therefore adulterate the findings. The author of this paper suggests an extended study, which considers country-specific variables and circumstances.