While the money involved is relatively small — about $50 billion in a $9 trillion economy — the phenomenal growth of Internet finance is intensifying competition for deposits and putting pressure on China’s dominant state-run banks, which are already struggling to cope with a severe cash squeeze. Internet finance is also emerging at a time when the government is trying to contain the growth of shadow banking, which could be masking huge risks and liabilities that exist outside the purview of regulators.

Not everyone is pleased. In recent weeks, critics have referred to the online products as “vampires sucking blood out of banks,” and warned that investors may not be aware of the risks. Chinese regulators said in late February that they are considering new rules to govern the sector.

For their part, the leaders in Internet finance, such as Alibaba, Baidu and Tencent, play down the risks of their new investment products. They say they are operating within the law and putting the cash to work in investments that carry low risk. There are, of course, serious challenges ahead for Internet finance in China, analysts say. For instance, although the online deposits are promoted as if they were savings accounts, they are investment products that carry risk. The principal is not guaranteed, and if consumers begin to suffer losses, analysts say, there could be a flood of redemptions.

For the last decade, the government has aided state-run banks by placing a ceiling on the savings deposit rate and a floor on bank lending rates. The wide spread between the two, known as the net interest spread, has helped banks pocket fat profits that they needed to restructure after massive losses in the 1990s.

Savers, on the other hand, have seen the value of their cash deposits deteriorate, since the rate of inflation has usually been higher than the government-controlled deposit rate. Economists say the policy has acted like a tax on savers.