BEIJING, June 22 (Reuters) - China’s wealth management products totalled 12.8 trillion yuan ($2.06 trillion) as of the end of May, state media said, quoting the vice central bank head.
China’s market of wealth management products had grown at a rate of between 60 and 80 percent annually for a few years before it decelerated to 30 to 40 percent in 2013, Pan Gongsheng said in remarks published on Xinhua news agency on Saturday.
Fuelled by savers’ and companies’ thirst for higher returns, China’s wealth management sector has exploded in recent years. But the opaque nature of the sector has fed concerns about the industry’s health.
Pan said the authorities would do more to ensure the value of people’s financial assets are preserved and increased, according to Xinhua.
Regulation of the wealth management products market “should be strengthened to control risk and push forward the healthy development of the sector”, Pan was quoted as saying.
With China’s growth expected to slow to a 24-year low of 7.3 percent this year, there are growing concerns about the level of risk associated with the financial sector.
In May, a deputy governor of China’s central bank, Liu Shiyu, said China should reorganise its wealth management industry as it is unduly raising funding costs and encouraging savers to behave like gamblers by chasing after lucrative short-term returns. (Reporting by Sui-Lee Wee; Editing by Nick Macfie)