Schroders, BNP Paribas among foreign firms rushing to tap China’s US$18 trillion wealth-management opportunity

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British investment manager Schroders to launch the first batch of funds in China this year, company executive tells the Post, as it receives fresh public fund licence

BNP Paribas and Agriculture Bank of China launch wealth-management joint-venture as regulator vows consistent and continued financial opening

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People walk in Nanjing Street main shopping and tourist area towards the Bound during Labour Day in Shanghai, China. Photo: EPA-EFE

Iris Ouyangin Shenzhen

Published: 10:00am, 11 Jun 2023Updated: 10:06am, 11 Jun 2023

Schroders plans sales of its first batch of fund products in mainland China this year, after it received a fresh licence to operate a wholly foreign-owned public fund-management company, as international fund managers accelerate expansion into the world’s second-largest asset-management market, seen growing to US$40 trillion by 2030.

“Our belief is that the mainland China market has great potential and there is demand for long-term alpha, as well as for a wide range of investment products, including pension, ESG and wealth management, alongside digitalised services,” David Guo, China CEO at Schroders, told the South China Morning Post.

The British investment manager, with £737.5 billion (US$887.2 billion) assets under management globally, is the latest foreign entrant in the fast-growing asset-management industry in China, where household wealth is compounding at rates faster than GDP.

Schroders joins others such as BNP Paribas, Fidelity International, Neuberger Berman and AllianceBernstein in eyeing an industry buoyed by rising household wealth and the growth of the country’s pension system.

Motorists wait at a traffic signal light in Shanghai, China. Chinese stocks staged a sharp rebound as optimism that the Federal Reserve will pause interest-rate hikes in June helped rekindle risk sentiment. Photo: Bloomberg

A wealth-management joint-venture between BNP Paribas – the largest bank in France – and Agricultural Bank of China (ABC) was also given the greenlight this week by the National Administration of Financial Regulation (NAFR) to commence operations, after it received the initial approval last year.