China Asset Management At An Inflection Point

The asset management industry in China is experiencing unprecedented growth compared to other markets. 

Assets under management reached $16 trillion by the end of last year, representing a ten-fold increase over the past decade. At the same time, a significant portion of Chinese wealth remains held in $28 trillion of bank deposits. These deposits are starting to be unlocked and will accelerate the growth and maturation of the asset management industry.

The industry is at an inflection point that marks the beginning of multiple waves of transformation. This will be characterized by the shift of funding from the retail to institutional segment, the opening up of distribution channels, and the proliferation of active asset managers. Transition from shadow banking to capital-markets driven financing, and growing cross-border connectivity between China and global markets, are other factors driving change. 

These waves will usher in a new era of asset management amid a slowdown in the domestic economy, alongside policymakers’ continued commitment to professionalize and liberalize the market.

We worked in partnership with the World Economic Forum to capture the recent changes affecting the industry, and how the resulting dynamics will translate into both opportunities and challenges. The resulting paper prioritizes three areas that will have a far-reaching impact: accelerating pension reform to institutionalize the market; capitalizing on asset management policy and regulatory change to accelerate industry development; and achieving leapfrog transformation via fintech innovation.

This report was also authored by Kai Keller, Initiative Lead, The Future of Financial Services in China and Beyond, World Economic Forum Beijing Representative Office.