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China’s wealth management products total $2.62 tril

China’s wealth management products total $2.62 tril

Sunday, June 22, 2014 – 12:58

Reuters

BEIJING – China’s wealth management products totalled 12.8 trillion yuan (S$2.62 trillion) as of the end of May, state media said, quoting the vice central bank head.

China’s market of wealth management products had grown at a rate of between 60 and 80 per cent annually for a few years before it decelerated to 30 to 40 per cent in 2013, Pan Gongsheng said in remarks published on Xinhua news agency on Saturday.

Fuelled by savers’ and companies’ thirst for higher returns, China’s wealth management sector has exploded in recent years. But the opaque nature of the sector has fed concerns about the industry’s health.

Pan said the authorities would do more to ensure the value of people’s financial assets are preserved and increased, according to Xinhua.

Regulation of the wealth management products market “should be strengthened to control risk and push forward the healthy development of the sector”, Pan was quoted as saying.

With China’s growth expected to slow to a 24-year low of 7.3 per cent this year, there are growing concerns about the level of risk associated with the financial sector.

In May, a deputy governor of China’s central bank, Liu Shiyu, said China should reorganise its wealth management industry as it is unduly raising funding costs and encouraging savers to behave like gamblers by chasing after lucrative short-term returns.

 

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About bambooinnovator
KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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