China – Financial
China has a young financial services & professional
services sector that is expanding at explosive rates to meet the demands of a
fast growing and increasingly wealthy nation.
Key trends that are reshaping China’s financial market are
Online banking was a popular buzzword within
China’s financial industry last year. These shifts in banking bring big
opportunities for future growth. Since the first launch of an
internet-based wealth management product the number of registered users had
gone beyond 149 million by the third quarter of last year.
Internet users from 20 cities across China, 94%
of them have used an online payment platform. China is increasing innovation in
digital payment via a variety of methods, including QR-codes, mobile-payments,
etc. The data behind consumers’ digital payments make financial industry to
further understand its consumer from different perspectives, thus realizing a
win/win situation for both the credit card and wealth management market.
The elderly population has become more
financially independent and secure. 70% of surveyed people over the age of 55
claimed to have purchased investment or wealth management products.
Additionally, more than half of the older respondents had life insurance, while
45% have at least one credit card.
China's rapid technological progress has brought about a revolution in the
country's banking industry.
China’s insurance sector is going through a period of
momentous changes, which will shape the future of the industry, creating new
challenges or exacerbating existing ones, but also opening up spaces of
opportunity and growth for global insurance companies well prepared for the
journey. It is estimated that the total life premiums will grow from 1.5
trillion RMB in 2017 to 1.86 trillion RMB in 2020.
Progressive moves to a non-tariff
system in motor insurance business, which contributes ca. 77% of property and
casualty (P&C) premium , was started in 2013 and extended to an increasing
number of cities in 2015 and 2016. This is transforming the motor insurance
business, marked by oversupply and an already fierce competition which is now
intensifying, causing further dropping of premium rates.
China’s bond markets are in their infancy and remain
fragmented in terms of regulation but they are growing rapidly and will be an
important component in the building of China’s capital markets.
It is predicted that China's local government bond market
will grow to more than $3 trillion in the next three years from the current $1
China's bond market will double in size from the
current $9 trillion over the next five years, overtaking Japan's to
become the world's second largest behind the United States
Chinese financial firms increasingly want to open funds in
the country and tap the multitrillion-dollar institutional investor market
Chinese private funds' assets under management grew 54.6
percent last year, to $398 billion. Institutional assets across the country
leaped 500 percent from $1.1 trillion to $7.1 trillion between 2005 and 2015,
and could hit $10.8 trillion by 2021 with global asset managers
taking an increasing proportion.
China could very well be number two or number three in hedge
funds and private equity within the next two to three years.