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Emerging institutional investors in China (English)

This report describes the existing structure and activities of institutional investors in China. It identifies key principles for building a solid institutional investor base going forward. The nation's institutional investors are largely comprised of life insurance companies and pension and investment fund managers. In addition, trust and investment companies (TICS) and securities companies offer their clients discretionary asset management services. Overall, China's ratio of institutionally-managed assets is small compared to developed markets, representing around 11 percent of GDP. China has the potential to build one of the largest institutional investor bases worldwide. Promoting the emergence of competent institutional investors is an important complement to an overall capital markets development strategy. Since institutional investors tend to have longer-term investment time horizons, they provide an ideal source of funds for investment in longer-term government and infrastructure bonds. Moreover, institutional investors would add depth and liquidity to the equity markets. Tapping into this demand will improve prospects for the market to better absorb increased equity supply resulting from the sale of state shares. Institutional investors would increase pressure on firms, listed and otherwise, to adopt better corporate governance structures and practices. For the purpose of efficiency, simplicity and fairness (ensuring a level playing field), common standards would be applied to all investment management institutions that manage discretionary investments of others, including insurance companies, pension funds, investment fund managers, TICs and securities companies. A thorough and coordinated review of existing regulations would be sought with the aim of upgrading them where deficient, and to harmonize them for all classes of investment management institutions. Similarly, action would be taken to harmonize the professional qualification requirements of employees who advise clients or make investment decisions on their behalf. The necessary professional skills involve investment analysis and portfolio management.


  • Author

    Kim, Yongbeom; St Giles, mark;

  • Document Date


  • Document Type

    Working Paper

  • Report Number


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  • Country


  • Region

    East Asia and Pacific,

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  • Doc Name

    Emerging institutional investors in China

  • Keywords

    standing committee;institutional investor;net asset value;securities companies;investment fund;security company;insurance companies;individual account;Fund Management Company;Agricultural Bank of China;legal and regulatory framework;local social insurance agency;quality of credit information;life insurance;mutual fund;commercial bank;government bond;capital market development;fund asset;money market fund;collective investment scheme;money market instrument;equity market;state share;bank deposit;investment management service;fixed income fund;interest rate risk;credit information service;foreign joint venture;mutual fund share;domestic bond market;life insurance product;foreign portfolio investment;power of attorney;market for bond;form of investment;creating new product;public pension fund;years of service;foreign institutional investor;private financial institution;public pension system;management of city;capital market participant;sale of security;venture capital fund;government debt market;internal audit function;disparity in income;private equity fund;capital market investor;social security costs;external audit function;risk management system;investment time horizon;liberalization of interest;life insurance industry;asset management services;role of bank;Merger and Acquisitions;interest rate control;international capital market;asset management company;asset management companies;domestic interest rate;corporate bond market;financial service industry;intermediary financial institution;interest rate future;asset and liability;sale of share;bank financial institutions;domestic financial sector;conflicts of interest;equality of treatment;implicit government guarantee;government bond market;unfair competitive advantage;defined benefit pension;Separating from Bank;social security benefit;state-owned banks;state owned bank;investments in equity;income tax purpose;ownership of asset;pension fund portfolio;liquid capital market;Insurance and Pension;foreign exchange regulation;high inflation rate;asian financial crisis;law and regulation;investment in property;lack of regulation;foreign investment bank;Investment securities;institutional investment sector;private sector company;corporate insurance;social security program;number of shares;personal income tax;joint stock company;life insurance policy;bank branch manager;fixed income security;local government structure;insurance premium rate;portfolio equity investment;local government staff;life insurance business;initial public offering;Fixed income securities;investment in security;Investment companies;corporate pension;investment restriction;corporate governance;foreign bank;security investment;long-term investment;infrastructure bond;guaranteed return;financial system;



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Kim, Yongbeom; St Giles, mark;

Emerging institutional investors in China (English). Washington, D.C. : World Bank Group.