Nicsa International Committee Reviews Opportunities in Chinese AWM Market

The International Committee hosted a discussion on developments in the China investment and funds industry. The Committee invited Dean Chisholm, who lead Invesco business in China & its wider region for many years, and Qing Ni, PwC’s Head of Asset & Wealth Management in Chinese Mainland, based in Beijing. The Committee also invited participation by representatives from Franklin Templeton with experience working in China through joint venture investment entities. 

The asset and wealth management (AWM) industry in China continues to evolve, underpinned by regulatory reform, growing investor demand and availability of new collective investment products and services.

Qing Ni went through PwC’s latest July 2025 industry update highlights, describing both the growth trajectory of the market and the various challenges reshaping the industry. Dean Chisholm then described Invesco’s and his own views on development of the investment market in China, including his own experience in working in the market over multiple decades.

Strong AuM Growth Amid Structural Shifts

According to PwC’s summary data, overall assets under management in Chinese Mainland investment products reached RMB 136.1 trillion in 2024, reflecting a steady upward trend. During this period, regulatory changes aimed at harmonizing local regulations with global standards and improving efficiency of distribution were also put in place by securities industry regulators. While bank wealth management products remain a growing segment of the investment market, traditional wealth products remain a relatively small component of the retail market. Insurance asset management products and public funds have emerged as strong growth drivers, registering compound annual growth rates (CAGR) of 22.7% and 16.7% respectively between 2018–2024.

By contrast, segments such as trust fund plans and segregated managed accounts have contracted, signaling a long-term shift towards regulated, transparent vehicles.

Takeaway: Growth is now concentrated in standardized and regulated products, aligning with China’s broader financial reform agenda.

ETFs and Bond Funds Lead Product Innovation

The PwC summary, along with the views of participants, notes an increasing market interest in ETFs and bond products. Between 2023 and 2024:

• Bond ETFs grew 80%, reaching RMB 1.3 trillion.
• Stock ETFs rose 75%, hitting RMB 3.6 trillion.
• Traditional hybrid funds, by contrast, declined by double digits, with equity-biased and bond-biased hybrids falling 11% and 31% respectively.

This product mix reflects investors’ preference for cost-effective, transparent, and liquid vehicles amid a volatile market. The trend is reinforced by declining management fee rates across nearly all public fund categories—stock funds, hybrid funds, and ETFs all saw fee compression of 5–14% between 2022–2024.

Takeaway: ETFs and bond funds are at the forefront of growth, while fees continue to face downward pressure.

Policy Spotlight: Action Plan for Development of Public Funds

A major regulatory milestone arrived on May 7, 2025, with the issuance of the Action Plan for Promoting the High-Quality Development of Public Funds. Key provisions include:

• Optimizing fund operation models: promoting floating management fee models for actively managed stock funds, stricter benchmark supervision, and enhanced disclosure of performance, fees, and turnover.
• Strengthening incentives and governance: tying fund manager remuneration more closely to long-term results, with significant penalties for underperformance over three years relative to benchmarks.
• Boosting equity investment: raising the weight of equity-related indices in regulatory classifications, fast-tracking registration for equity ETFs (5 days) and active equity funds (10 days) and encouraging thematic and index product innovation.

Takeaway: Regulators are actively steering the industry toward long-termism, transparency, and greater equity allocation, while seeking to balance investor protection with product innovation.

Bottom Line

The Chinese investment industry remains comparatively unique in its stage of development relative to its overall size, but is gradually entering a new stage of scale, sophistication, and regulatory maturity. Strong AUM growth, the rise of ETFs and bond funds, and declining fees highlight an industry adapting to investor demand for efficiency and transparency. Meanwhile, the 2025 Action Plan underscores policymakers’ determination to guide the sector toward high-quality, long-term, and equity-driven development.

The China domestic market remains limited in its distribution channels, with banks continuing to hold an out-sized role and undue influence on product rollouts and investors’ product retention rates.  This will likely evolve slowly toward a more Western style of distribution choices, including introduction of RIA’s and true wealth management capabilities.

As the market grows more competitive, asset managers will need to innovate in product design, embrace regulatory shifts, and deliver lasting value to investors. The message is clear: China’s industry is not just expanding—it is transforming for the future.

To gain more insights around trends impacting the global asset and wealth management industry, join Nicsa’s community of more than 30 committees. We thank our International Committee, PwC, Dean Chisholm and Franklin Templeton for shedding light on an important and growing market. 

Observations contained in this work do not necessarily reflect the views of Nicsa or any member organization. Nothing herein is intended to be or should be construed as legal advice. Contact your own counsel in order to obtain advice regarding legal or regulatory matters.