Asset managers set for critical transition

China's asset management industry is entering a decisive new phase, pivoting away from breakneck expansion toward quality-driven growth and refined operations.

This shift, analysts said, will lay the foundation for a more resilient, innovation-led financial system better equipped to channel capital into the real economy.

The total scale of China's asset management industry reached 184.53 trillion yuan ($26.7 trillion) by the end of 2025, up 13.1 percent from the end of the previous year, according to a report released by CITIC Financial Holdings recently.

With financial reforms deepening, technological innovation accelerating, and opening-up steadily expanding, the next five years are expected to mark a critical transition period as China's asset management industry moves from being large to becoming strong, the report said.

Industry participants believe this shift reflects the continued impact of new asset management regulations, proactive adjustments in business strategies and changes in the market environment.

By segment, all major sectors showed structural optimization and steady growth.

Bank wealth management products totaled 33.29 trillion yuan at the end of 2025, 11.15 percent more than the previous year; mutual funds reached 37.71 trillion yuan, or 14.89 percent higher and private equity funds stood at 22.15 trillion yuan, rising by 11.25 percent.

The outstanding balance of insurance funds utilization reached 37.46 trillion yuan, an increase of 12.64 percent; trust companies' trust assets totaled 32.43 trillion yuan, up 20.11 percent; pensions managed by fund companies amounted to 6.85 trillion yuan; and private asset management businesses of securities and futures institutions totaled 12.3 trillion yuan.

Through investments in bonds, non-standardized debt assets and equities, WMPs provided approximately 21 trillion yuan in funding support to the real economy, said a report released by the China Banking Wealth Management Registration and Depository Center.

In recent years, the asset and wealth management institution supervision department of the National Financial Regulatory Administration has supported trust companies, wealth management subsidiaries and insurance asset management firms in channeling funds into technological breakthroughs, high-end manufacturing and strategic emerging industries, helping advance high-level technological self-reliance and the building of China into a science and technology powerhouse.

These financial institutions have also been encouraged to strengthen financial support for green and low-carbon development.

WMPs have fully leveraged their role in optimizing capital allocation, connecting funds with the financing needs of the real economy through multiple channels.

Investment in green bonds exceeded 380 billion yuan, while allocations to special-purpose bonds supporting the Belt and Road Initiative, regional development and poverty alleviation surpassed 110 billion yuan. These products have provided nearly 5.4 trillion yuan in funding support for the development of micro, small and medium-sized enterprises, the banking wealth management report said.

Last year, China's wealth management market continued to optimize its product structure, with 254 environmental, social and governance-themed WMPs issued during the year.

By the end of 2025, the outstanding balance of ESG-themed WMPs reached 311 billion yuan, up 29.96 percent year-on-year. More than 200 WMPs focusing on specialized and innovative enterprises, rural revitalization, the Guangdong-Hong Kong-Macao Greater Bay Area and green and low-carbon themes remained outstanding, with a combined balance exceeding 100 billion yuan.

Zhongtai Securities said China's wealth management industry has moved beyond its phase of rapid, disorderly expansion and entered a "value era" focused on refined operations.