Illustration: Peter C. Espina/GT

Traditional methods of financing have seen new forms of competition rapidly catching up. Online crowdfunding, with websites like Kickstarter leading the pack, is rapidly enabling many hopefuls to seek money to release their latest album, fund their new app, or even pay for an operation for a loved one.

As this revenue stream snowballs ever faster in the West, China is beginning to catch up. Websites like AngelCrunch and Demohour are becoming very recognizable parts of the Chinese Internet landscape.

However, questions are being asked about how sustainable this model is in China, how secure the transactions are, and how much knowledge people have that their funds will go to the stated destination. On another front, while crowdfunding in the West mostly goes toward creative or individual projects, even in the shape of apps, in China, it seems there is rising enthusiasm among Internet users to fund real private businesses.

At the end of 2014, the country had 649 million people online and major websites scrambled to tap into their collective wealth. Weibo, Renren and WeChat have all been used in the past for crowdfunding, particularly by the film industry. Alibaba and other Chinese giants have followed suit, with dozens of movies and television series having seen the light of day due to help from their fans.

On the surface, this is all part of a growing awareness of the power of digital publishing. Xinhua has written that "in the past year, many traditional industries such as publishing and advertising have developed and released Internet applications. The value of digital publishing in China increased by 31.2 percent in 2014 to 254 billion yuan ($41 billion)."

So far, this does not seem that different to the West, where digital projects are the most high-profile to find success via crowdfunding. Examples include the video game Wasteland 2, released in September 2014 after raising nearly $3 million on Kickstarter in just one month.

Although the Chinese crowdfunding landscape may have started by imitating the Western model, this is likely to change rapidly. While Internet users may crave more TV or video games, China faces more urgent problems. Charity projects, infrastructure building in poorer areas, or health and education programs are just some of the numerous areas that could benefit from private aid.

Furthermore, as crowdfunding snowballs, the types of projects it funds will show local authorities and the central government just what their people consider to be important.

For example, the charity LaLaShou saw its annual conference to seek donations lead to the creation of a dedicated crowdfunding venture hosted by Tencent. LaLaShou sought money to raise awareness for disabled children in Xi'an, while also seeking to train their parents and carers. The campaign netted over 50,000 yuan after 47,000 people retweeted the messages on Tencent in less than two months in late 2014.

This might not seem like much but it is an encouraging start and shows that, given the population of China, there are likely to be millions of people willing to put their hands in their pockets to help charitable causes.

Crowdfunding also addresses a real concern of Chinese charities. With the exception of catastrophic disasters such as the Sichuan earthquake of 2008 or individual social media stories that went viral, Chinese donations have been focused on local people contributing to fix local problems. Through crowdfunding websites like CTQuan, this model may be surpassed as Chinese netizens can view, understand, and contribute to fixing problems far away from home.

However, while crowdfunding in China is growing, it is still a fledgling business. Kickstarter had many teething problems at first, in terms of accountability, proof that financed projects were pursued, and continuing collaboration between donors and receivers. China must learn to avoid these same pitfalls.

The US and Europe have passed stringent regulations on equity crowdfunding but China has not, meaning that its major sites are operating on little more than blind faith or internal standards at the more established sites.

In 2015 and beyond, the growing presence of Alibaba, Tencent and others should begin to create self-regulation in Chinese crowdfunding. If a market can be created where Internet giants and individual efforts can both find room, the place crowdfunding takes at the heart of the Chinese Web could be something to see.

The author is a Mexico-based analyst on Chinese politics and economics. bizopinion@globaltimes.com.cn