China’s Fund Industry Hits 85 Trillion Yuan, Global No. 2

China’s fund industry has reached a total asset management scale exceeding 85 trillion yuan (approximately $11.7 trillion), making it the second-largest fund market globally, according to an announcement by China Securities Regulatory Commission (CSRC) Chairman Wu Qing at the 4th Member Representative Conference of the Asset Management Association of China (AMAC) on June 6.

The milestone caps nearly three decades of development since the establishment of China’s first batch of public fund management companies in 1998, known as the “old ten.” Wu Qing described the industry’s journey as “extraordinary and remarkable,” noting that the sector now serves over 860 million investors with a penetration rate of 60 percent, as Wall Street CN reported.

Record-Breaking Scale and Growth

The 85 trillion yuan figure encompasses both public funds (gongmu jijin) and private funds (simu jijin). Public funds alone have exceeded 39 trillion yuan in scale, while private securities funds have surpassed 7.8 trillion yuan — nearly doubling from the end of the 13th Five-Year Plan period.

Over the past five years, the fund industry’s stock investment grew 41 percent to reach 13.4 trillion yuan, with funds now holding 13.7 percent of the A-share circulating market value. Public funds distributed 2.5 trillion yuan in dividends and generated 3.6 trillion yuan in profits for investors over the same period.

Regulatory Transformation Underway

Wu Qing’s speech signaled a significant shift in regulatory priorities, emphasizing that the industry must move from a “scale-focused” to a “return-focused” model. He warned against what he called chronic problems such as “betting on specific sectors, style drift, and high-position issuance,” urging the industry not to return to “the old path of chasing scale and making quick money.”

The announcement came just one day after the State Council issued comprehensive guidelines on strengthening regulation, preventing risks, and promoting high-quality development of private investment funds. The CSRC is developing a three-year action plan to implement these guidelines, along with a “1+N+X” institutional system covering market access, ongoing supervision, risk resolution, and service development.

On programmatic trading, Wu Qing stated that regulators will “continue to improve the regulatory mechanism, place greater emphasis on fairness and standardization, strengthen targeted supervision, effectively prevent the abuse of technological advantages, and resolutely crack down on illegal activities such as market manipulation.”

Supporting Innovation and “New Quality Productive Forces”

A central theme of Wu Qing’s address was the fund industry’s role in financing technological innovation and industrial upgrading. Public funds have invested over 6 trillion yuan in advanced manufacturing and technology sectors, while private equity and venture capital funds injected 5.25 trillion yuan into unlisted companies over five years — equivalent to 90 percent of domestic equity financing during that period.

Wu emphasized the importance of investing “early, small, long-term, and in hard technology,” and pledged support for state-backed funds to improve fault-tolerance mechanisms and evaluation standards.

Industry Consolidation and Quality Improvement

The CSRC has overseen a significant cleanup of the private fund sector, with over 20,000 institutions removed from the market. At the same time, the industry has developed more than 10 fund managers at the 100-billion-yuan scale and over 400 at the 10-billion-yuan scale, reflecting a trend toward consolidation and quality improvement.

However, Wu acknowledged persistent structural challenges. Equity public funds account for less than 30 percent of total public fund AUM, well below the 60 percent average in mature markets. He called for addressing product homogenization, internal competition, and gaps in professional service capabilities.

Broader Context: Shanghai’s Asset Management Ambitions

The milestone comes as Shanghai accelerates its push to become a global asset management hub. On June 3, the city released a new blueprint targeting 55 trillion yuan in AUM by 2030, representing one-third of the national total, as People’s Daily reported.

The fund industry’s growth also unfolds against the backdrop of China’s 15th Five-Year Plan period (2026-2030), which emphasizes nurturing “patient capital” and cultivating first-class investment banks and institutions. A low-interest-rate environment is driving asset reallocation demand from both institutions and residents, while global asset allocation undergoes deep rebalancing amid international financial market volatility.

What to Watch

Market participants will be watching for the release of the CSRC’s three-year action plan for private fund regulation, as well as specific policy measures to increase the proportion of equity funds. The implementation of the State Council’s private fund guidelines and Shanghai’s asset management center blueprint will also be key developments to track in the coming months.

As Wu Qing noted, the fund industry “is at a critical juncture of transitioning from quantitative expansion to qualitative improvement,” with the 85 trillion yuan milestone serving as both a celebration of past achievements and a foundation for the next phase of development.