A year after our initial insight report China Asset Management at an Inflection Point, we are delighted to present this second publication exploring the role of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) in the ongoing transformation of asset management in China.
Over the past year, the Chinese asset management market has continued developing at lightning speed. Overall, industry assets under management (AUM) reached $18 trillion and a multitude of local entities and partnerships between domestic and global industry leaders have been set up to service this ever-growing demand. Section one of this publication provides a brief update on the major transformation drivers highlighted by our initial report.
It is the interplay of two dynamics unfolding in parallel that make developments in China so exciting: the rapid professionalization of the domestic market paired with global industry leaders expanding their Chinese footprints through several different means. As a result, the Chinese market continues to integrate into the global system and capital flows more freely. These dynamics benefit global investors and provide important opportunities for Chinese households: both can enjoy access to enhanced diversification opportunities and sophisticated products. The amount of Chinese savings and investments still to be unlocked remains staggering and the impact on global capital markets, once these monies are allowed to flow freely, is actively being explored.
At a time when new policies were being considered, the GBA offered itself as an ideal testing ground. The region is expected to lead a plethora of innovative, cross-border asset management opportunities in parallel with existing, nationwide quota regimes. The success of these new initiatives – i.e. the GBA’s transition from sandbox to bridge – is critical for national adoption and the realization of the numerous benefits promised. A community of industry, public sector and academic leaders convened by the World Economic Forum has been exploring the nature of these opportunities, and the enablers required to unlock them, via physical and virtual workshops, closed-door discussions at the China Business roundtable, and expert interviews. Oliver Wyman, the Forum’s knowledge partner in this initiative, has supported and co-facilitated these dialogues.
This report presents the findings from these multi stakeholder discussions, with a focus on the longer-term opportunities that the GBA could unlock. It also identifies the critical enablers required to realize these opportunities. We hope that this publication will continue to facilitate much-needed dialogue between industry leaders and policy-makers.
This report was also authored by Kai Keller, Initiative Lead, The Future of Financial Services in China and Beyond, World Economic Forum Beijing Representative Office.