Wealth Management Products in China: Recent Scandals and Regulatory Loopholes

Abstract

The popularity of wealth management products in China is strengthened by the fact that inflation in China has surged past official interest rates and public investors have sought higher returns by investing in more profitable products rather than effectively losing money in bank deposits. ––The Chinese Government has a tolerant attitude towards wealth management products. ––This article tries to understand why wealth management products in China are popular and what systemic risks are involved.

Keywords: wealth management products, regulatory loopholes