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Sunday, June 26, 2022

CHINA’S AGE PROFILE AND PENSIONS #413

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Graham Perry
Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer.

GOOD MORNING FROM LONDON

The change in China’s age profile has attracted the attention of the world’s largest asset managing companies keen to participate in the development of individual private pensions. BlackRock has received approval for a joint venture with the China Construction Bank as well as the green light for a wholly owned mutual fund business.

Momentum to upgrade foreign involvement in retirement wealth management  was created by a 2019 forum attended by Larry Fink, CEO of BlackRock and, significantly, by Liu He now the most senior adviser on economic and financial issues in Beijing. Goldman Sachs Asset Management are now partnered with Bank of China and JP Morgan have entered the fast developing pension and retirement market in China.

Lauren Johnston is a Visiting Lecturer at the University of Adelaide and says that China’s population profile has changed rapidly. “There really weren’t that many old people until quite recently and they were pretty much all taken care of inside the family”. The situation is different with “the dramatic inversion of the population pyramid”. Johnston notes that China’s capital markets have also changed rapidly but remain under-developed compared to examples in the US and W Europe. The development of the private pension system should lead to a greater propensity to consume by the elderly in China who, hitherto, have always preferred saving to consumption.

Western Business continues to see development and opportunity in China and it makes the big players reluctant to join in the Decoupling policy of Western Governments. Businessmen have their agendas and Politicians have their agendas – the two agendas are different. This is inevitable. And it contributes to the major geo-political challenge of the present day. What To Do About China? It remains the dominant #1 key question for the West, Japan, Australia and others – do they embrace China or do they prepare for War with China?

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