Shanghai targets 55 trillion yuan in assets under management by 2030

Shanghai has unveiled a new target for its ambitions to become a global asset management hub, "aiming to grow assets under management (AUM) to 55 trillion yuan by 2030, equivalent to one-third of the national total". The goal was outlined in the "Several Opinions on Deepening the Development of Shanghai as a Global Asset Management Center" (the "Opinions"), issued by the General Office of the Shanghai Municipal People's Government on June 2.

As one of China's foremost centers of reform and opening-up and a key gateway linking domestic and international markets, Shanghai has long been a focal point for global asset managers. Since becoming the first city in China to formally launch a global asset management hub initiative in 2021, Shanghai has made remarkable progress. Its share of the national AUM has risen from less than one-quarter to about 30 percent. The city accounts for roughly half of China's insurance asset management business and about 40 percent of public mutual fund assets, while its private fund sector remains the largest in the country. All six wholly foreign-owned public fund management firms established in China and all five joint-venture wealth management subsidiaries of banks are based in Shanghai, underscoring the city's role as a leading destination for foreign asset managers operating in the Chinese market.

Against a backdrop of profound changes in the global political and economic landscape, Shanghai's efforts to build a global asset management center face new opportunities and challenges. The "Guidelines on Supporting the Accelerated Development of Shanghai as an International Financial Center" issued by the Central Financial Commission, together with Shanghai's 15th Five-Year Plan, set a new target for the city's ambition to become a leading global asset management hub: raising AUM to 55 trillion yuan by 2030, accounting for one-third of the national total.

How does Shanghai plan to achieve the goal?

The Opinions set out 21 policy measures across five areas: strengthening financial markets, fostering leading institutions, diversifying asset management products and services, expanding high-standard opening-up of the asset management sector, and improving the broader industry ecosystem.

Financial markets are seen as the foundation of Shanghai's asset management ambitions. The document calls for a broader range of underlying financial products and supports qualified asset managers in participating in real estate investment trusts (REITs). It also emphasizes strengthening the infrastructure underpinning renminbi-denominated assets and ensuring the stable operation of financial markets and market infrastructure.

Differentiated and specialized asset management firms are viewed as another key pillar. The Opinions seek to attract and foster a wider range of asset management institutions. It supports financial institutions from countries and regions participating in the Belt and Road Initiative in establishing asset management businesses in Shanghai and conducting investment activities. Foreign asset managers are encouraged to leverage the strengths of their international shareholders and pursue differentiated growth strategies, while qualified foreign institutions are spurred to apply for additional business licenses.

Convenient and efficient cross-border capital allocation channels are also central to Shanghai's plans. The Opinions call for smoother domestic and international asset allocation channels and optimization of market connectivity mechanisms, including the steady inclusion of products such as REITs in the Shanghai-Hong Kong Stock Connect program. It proposes improving systems for qualified investors, refining the Qualified Foreign Institutional Investor (QFII) framework, further facilitating investment under the Qualified Foreign Limited Partner (QFLP) pilot program, and supporting asset managers in rolling out cross-border products that help global investors gain exposure to domestic assets through streamlined allocation solutions.

The Opinions also aim to expand asset management products and services, enhance the industry ecosystem, and create a more supportive environment for market participants.

The objective extends beyond simply growing AUM. The policy also involves elevating Shanghai's overall standing as an international financial center. Ge Qing, Director of the Macroprudential Policy Department at the Shanghai Head Office of the People's Bank of China (PBOC), told International Finance News that building a global asset management hub is a key lever for upgrading Shanghai's international financial center status and provides an important application scenario for renminbi internationalization. Looking ahead, the Shanghai Head Office of the PBOC will focus on implementing the policies, deepening financial opening-up, advancing financial market connectivity, improving cross-border financial services, and boosting the global appeal and pricing influence of renminbi-denominated assets.