China’s $3.5 Trillion Wealth Product Market Suffers Losses
- Bond rout has broken the buck on slew of wealth accounts
- Transition to NAV-based products increases odds of losses
This article is for subscribers only.
Chinese investors and savers just experienced something that’s never happened before: losses on some of their 25 trillion yuan ($3.5 trillion) state bank issued high-yield wealth management products.
Those came as the worst Chinese bond rout in a decade colluded with a push by regulators to transform the nation’s wealth market. They are doing away with products that offer guaranteed returns to tamp down on a key source of leverage and risk at the nation’s lenders.