The
hedge fund
A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as s ...
industry in
China was established in the early 1990s, and has so far undergone four stages: infancy, formation, rapid expansion, and adjustment and
standardization.
Categories
Currently hedge funds in China fall into two categories. One is those companies backed up by the government, including
broker
A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confu ...
s managing pooled property, trust and investment companies'
trust
Trust often refers to:
* Trust (social science), confidence in or dependence on a person or quality
It may also refer to:
Business and law
* Trust law, a body of law under which one person holds property for the benefit of another
* Trust (bus ...
and investment projects, and
investment companies managing their own
capital. The other is private hedge funds. Under the name of "Investment Consulting Company" or "Investment Management Company", they provide management for pooled property.
Economic growth trend
Against the background of China's
fast growing economy
An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the ...
, the number of hedge fund investors is increasing rapidly in the country, and the total amount of their wealth is increasing in step. By the end of June 2008, China's residents had
RMB
The renminbi (; symbol: ¥; ISO code: CNY; abbreviation: RMB) is the official currency of the People's Republic of China and one of the world's most traded currencies, ranking as the fifth most traded currency in the world as of April 2022. ...
19,460bn ($2,820bn) in
bank deposit
A deposit account is a bank account maintained by a financial institution in which a customer can deposit and withdraw money. Deposit accounts can be savings accounts, current accounts or any of several other types of accounts explained below.
...
s, of which 80% was in the name of 20% of the population. With such a huge amount of
cash
In economics, cash is money in the physical form of currency, such as banknotes and coins.
In bookkeeping and financial accounting, cash is current assets comprising currency or currency equivalents that can be accessed immediately or near-im ...
asset
In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can ...
s in hand, the
wealthy
Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating Old English word , which is from an I ...
's strong investment demand has provided hedge funds in China with a sufficient supply of capital. In addition, China's companies also have a huge sum of spare cash, which is also a primary source of capital for hedge funds.
Share of GDP
Data showed that hedge funds account for 0.6% of the
GDP
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...
in the USA, 0.35% in Europe, 0.2% in Asia, while only 0.1% in China. It is expected that China's GDP would quadruple in 10 years time and hedge funds would be about 0.4% of the country's GDP
In this case, China's hedge funds would expand 12-fold, and place China second in the world for hedge fund investments.
Bank deposits
Residential Bank Deposits in China 2003-2008H1
Year Residential Bank Deposits in China (billion RMB)
*2003 10,360
*2004 11,960
*2005 14,110
*2006 16,160
*2007 17,250
*2008H1 19,460
See also
*
Chinese stock exchanges (disambiguation), Chinese Stock Exchanges
*
Commodity trading in China
*
Banking in China
China's banking sector had () in assets at the end of 2020. The "big four/five" state-owned commercial banks are the Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China, and the Agricultural Bank of China, ...
*
Financial services in China
*
China Venture Capital Association China Venture Capital Association (CVCA) is a Venture Capital industry trade group that itself says "promotes the interest and the development of venture capital ("VC") and private equity ("PE") industry in the Greater China Region."
CVCA was foun ...
References
{{Economy of China
Industry in China
Finance in China
China