USD32.5 trillion

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USD32.5 trillion is a big number by any measure. It’s more than the size of America’s economy (measured by GDP as just over USD20 trillion) and is the total of all bank deposits held in China, currently earning an interest rate of 1.5%. You would have to think that at some stage, and possibly sooner rather than later, a large percentage of this sum will end up in other assets (i.e. stocks, bonds, funds, property or alternatives) as Chinese investors are gradually integrated into the global asset management sector. At the moment, their investment options are limited to those available within their own borders (mainly China A shares and Property) which, despite China’s amazing transformation and growth in recent times, is somewhat limited and lacks the diversification available to investors in other countries.

The first stage of this integration is the Guangdong-Hong Kong-Macau Greater Bay Area Wealth Management Connect scheme which is designed to allow mainland Chinese investors residing in the Greater Bay Area to invest in Hong Kong approved funds and assets which will be the first time that retail investors can (legally) invest overseas. In the same way that I predicted earlier this year that more foreign institutions and retail investors will start investing in China (see Mega Trend), the wave of Chinese investment overseas will undoubtedly transform the global wealth and asset management sector, starting with Hong Kong.

If this topic interests you, or you believe you or your organisation can make a contribution to the transformation taking place in Asia’s financial services sector, please express interest in joining our new Wealth Management Connect Taskforce via the link below.

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