China’s asset management sector to double to US$40 trillion by 2030 as household wealth, pension needs grow, McKinsey says

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The growth of the industry will be buoyed by rising household wealth and the growth of the country’s pension system, McKinsey & Company report says

Asset managers should diversify their offerings, enhance services and optimise sales channels to win market share amid fierce competition, McKinsey says

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China’s rapidly ageing population prompted the government to roll out an expanded private pension scheme in April last year, which could inject at least 120 billion yuan (US$17.8 billion) a year into the country’s asset-management market, analysts predicted at the time. Photo: AFP

Iris Ouyangin Shenzhen

Published: 5:30pm, 11 May 2023Updated: 5:44pm, 11 May 2023

China’s asset management industry will more than double in size to 280 trillion yuan (US$40.4 trillion) by 2030, as the expansion of individual wealth and pension needs requires financial companies to upgrade their products and services, according to a report by McKinsey & Company.

The sector was worth an estimated 130 trillion yuan at the end of last year, the consultancy firm said in the report released on Thursday.

The growth of the industry will be buoyed by rising household wealth and the growth of the country’s pension system. Chinese citizens’ individual financial assets are expected to increase in value at an annualised rate of 9 per cent to 47.5 trillion yuan by 2030, the report said.

“Given the constant rise of domestic [bank] deposits and the wealth management segment, pension reform and incremental capital inflow of overseas capital, China’s asset management industry will maintain steady and prudent growth,” the report said.

“The maturing of the pension system will bring sizeable long-term capital.”

02:12

Working until 70: Ageing in northeast China signals looming pension crisis

China’s rapidly ageing population of 1.4 billion people prompted the government to roll out an expanded private pension scheme in April last year, with banks, funds and insurance companies launching a flurry of new products as they eyed market share.