The Asset Management Industry in China: Its Past Performance and Future Prospects

Abstract

After 20 years of rapid growth, the asset management industry in China has reached total assets under management of $2.8 trillion—and more than $6.12 trillion when trust and bank wealth-management products are included. In its early development years, the industry experienced much growing pain. With the joint efforts of regulators and market participants over the past 20 years, China’s asset management industry has substantially improved. In this article, the authors review the industry’s historical development, composition, competition among various sub-industries, and key players, as well as its institutional and regulatory environment. It would be difficult to understand the past, present, or future of this industry without knowing the political economy as well as the ideological background of China’s economy in general and its capital market in particular. The authors review the background of the political economy to aid readers in understanding the mindset and perspectives of regulators, policymakers, and key players in this space. The authors also discuss future opportunities in the asset management industry, as the massive household wealth created during China’s 30 years of fast economic growth continues to look for reliable vehicles for investment. Outbound investment from China is a growing trend.

TOPICS: Emerging, real assets/alternative investments/private equity, portfolio management/multi-asset allocation