When I led my first study tour of Australian Wealth Management professionals to China in 2005, the local funds management industry was virtually non existent. Whilst many were predicting a rise in the funds sector at some stage, the stock market was going backwards, new listings had been suspended and the floor of the Shanghai Stock Exchange was deserted (see photo below taken during that visit)
How things have changed. According to the Financial Times, “Chinese funds increased their share of the global investment market significantly in the first three months of 2020, propelling the country from tenth to fifth position”.
China’s funds management sector is now larger than the UK, France, Japan and Australia (all regarded as large, established and mature markets) and accounts for 4.1% of worldwide funds assets. Only the US (with 47.9%), Luxembourg (8.8%), Ireland (5.8%) and Germany (4.6%) are larger than China’s and, with its ageing population and expanding middle class, it’s not hard to see China rising to 2nd place in the global funds table in the next few years.
The origins of the UK’s funds management sector goes back as far as 1868. Who would have thought that China would overtake them in just 15 years!