Beijing, Shenyang, Changchun, Shanghai, Guangzhou and Chongqing will be included in the programme from 1 March, in addition to the four cities that have already launched products for retirement savings, according to the China Banking and Insurance Regulatory Commission (CBIRC) at the end of last week.
Moreover, a further six financial institutions will be allowed to take part in the programme, bringing the total number of pilot wealth management companies to 10.
The regulator will also raise the funding cap for retirement savings wealth management products from RMB 10bn ($1.58bn) to RMB 50bn for each of the four financial institutions already permitted to take part.
For the six newly added wealth management companies, the funding cap will be set at RMB 10bn.
China unveiled the first batch of pilot retirement savings wealth management products in the cities of Wuhan, Chengdu, Shenzhen and Qingdao last year, aiming to broaden the sources of retirement income.
Foreign participation
Earlier this month, Blackrock CCB Wealth Management, a joint venture between Blackrock, China Construction Bank (CCB) and Temasek, the Singapore sovereign wealth fund, received the green light from the CBIRC to launch pension wealth management products in Guangzhou and Chengdu.
The regulator has previously designated four banks to pilot pension wealth management products, namely, the Industrial and Commercial Bank of China, CCB, China Merchants Bank, and China Everbright Bank.
Starting from 6 December 2021, the first batch of pension wealth management products were officially launched in four cities: Wuhan, Chengdu, Qingdao and Shenzhen. Any individual investor can purchase pension wealth management products worth up to RMB 3m.
Meanwhile, foreign asset managers are rushing to form joint ventures with Chinese banks in order to conduct wealth management business in China.
France-based asset manager Amundi and BOC (Bank of China) Wealth Management, the subsidiary of Bank of China, were the first to gain approval from the CBIRC to set up a joint-venture under the new wealth management framework, and a partnership between Schroders and BOCOM (Bank of Communications) Wealth Management won approval in February 2021. A partnership between Goldman Sachs and ICBC Wealth Management followed in the same month.
Meanwhile, JP Morgan Asset Management expanded its “strategic partnership” in March 2021 with CMB Wealth Management, the wealth management company of China Merchant Bank, and UBS is reportedly discussing a wealth management partnership with China Life Insurance.
Deutsche Bank aims to set up a joint venture with the wealth management unit of Postal Savings Bank of China, according to Caixin, which cited “people familiar with the matter” earlier this year.
