The last two years have been tough for China’s life insurers. Regulations that were introduced in late 2010 and early 2011 have made it much harder to sell products through branches of banks according to the bancassurance model. The insurers’ products have also suffered as a result of stiff competition from various quarters. However, various new policies that have been announced by the China Insurance Regulatory Commission (CIRC) through late 2012 should make it easier for the life insurers to boost their premiums and to increase their investment assets under management (AUM).
Retail investors remain confident about bank wealth management products (WMPs) despite growing regulatory concern and a number of high-profile defaults in recent months, according to new China Confidential survey data. This suggests that a sell-off of WMPs by retail investors is unlikely in the short-term, although there are signs that wealthier investors may be slightly less enthusiastic about WMPs than they were six months ago.
The China Banking Regulatory Commission (CBRC) announced on Wednesday its most significant attempt yet to rein in the riskier aspects of a ballooning wealth management product (WMP) market that had Rmb7.6tn under management at the end of 2012. We think the new measures – which target the most opaque forms of WMP – may significantly affect the business of those banks which have sold a high proportion of non-principal protected WMPs. We also think that the moves may divert funds away from the shadow financial system and into formal assets such as stocks and bonds.
Trading in RMB grows
As China continues to internationalise its currency, a small but growing number of multinationals are now using renminbi in cross-border trade.
Denise Law is a researcher for Renminbi Compass in Hong Kong. (4m 13sec)
An integrated research service from the Financial Times that provides premium, exclusive analysis and predictions on China investment themes.
Using a dedicated FT team of specialists in China and the UK, it taps Chinese sources from the grassroots to the political elite to forecast key trends and issues. It conducts proprietary research to supply its own insights into industry trends and consumer sentiment. By filtering the work of the best Chinese analysts and academics, it keeps you current on key debates as they unfold inside mainland China. Its broad aim is to help the professional investor navigate through the Chinese investment landscape.