While the further liberalization of the investment banking and money management industries in China has been overshadowed by the coronavirus crisis, wealth firms are nonetheless laying out plans to tap a market poised to reach $30 trillion in assets by 2023, according to consultant Oliver Wyman.
Here are the different paths asset managers can pursue in China and how some of them plan to proceed:The China Banking and Insurance Regulatory Commission has been encouraging foreign asset managers to work with the wealth management subsidiaries of Chinese banks or insurers. Global players are expected to bring to the table product design expertise, while the Chinese firms provide a vast distribution network and relationship managers.
At least six firms, including BlackRock and Vanguard, have told regulators they intend to apply to the Chinese securities watchdog, people familiar with the matter have said. "Wholly-owned fund management licenses will be one of the most sought after options for foreign companies, ” said Rachel Wang, director of manager research for China at Morningstar Inc."It allows them to offer more products and have a wide outreach to different types or sizes of customers.”
"Many of the joint venture asset management firms that foreign players set up with their Chinese counterparts have not been performing as expected, partly due to limited product offerings and less than ideal collaboration with the Chinese brokerages, ” said Qin from PwC.