The ties that bind: who owns what in China’s asset management industry

The Asset launches an interactive database tracking the changes shaping its future

AS China pursues reform and the opening up of its financial industry, building a strong institutional investor base is among the key objectives. Timing is prescient. A growing middle class and appetite for investing are underpinning the strong growth of asset gatherers such as insurance companies, pension funds and asset management firms. It is not just the domestic markets, many are beginning to pursue cross-border investing, opening offices in financial centres such as Hong Kong, Singapore and London.

It is against this backdrop that The Asset is launching an interactive online database on China’s asset management industry – The Asset Anagram.

The Asset Anagram provides a glimpse of China’s asset management landscape, featuring the entities, their shareholdings and the interconnection among the different groups.

Indeed, China’s asset management industry is becoming more integrated than ever. Assets under management that include businesses in banking, trust, securities, funds, futures, and insurance, have exceeded 100 trillion yuan (US$15 trillion) as of end-2017 (including cross-holding of assets), according to China’s central bank, The People’s Bank of China. With foreign access into China’s markets widening, China is attracting investors’ attention on a global scale.

Meanwhile, the industry itself is evolving. China has issued a new guideline aimed at regulating the country’s massive asset management industry. The new guideline has banned providers of asset management products from offering implicit repayment guarantee (刚性兑付) on wealth products. The new guideline will have a profound impact on China’s expanding wealth and asset management sector.

“The new rules raise two challenges for the asset management industry, namely how to reduce the existing illegal products by the end of 2020, and how to expand the business following their implementation,” says Cai Esheng, former vice chairman of the China Securities Regulatory Commission.

But one thing is certain. With Chinese asset managers expanding and growing their business reach, they will become a driving force in the global asset management industry.

Click on the link to learn more.