Wealth Management Products

Wealth management products (理财产品, WMP) are financial instruments that are sold by Chinese bank and non-bank financial institutions to both retail and corporate investors.

The rapid expansion of WMP’s since the turn of the decade has been spurred by the higher returns they provide compared to the interest rates for bank deposits that are capped by regulators, enabling banks to secure funds in excess of those that are obtainable at the deposit rate ceiling.

Both banks and non-bank financial institutions can raise and invest funds via WMP’s.

Banks often employ “channel” firms under their direct control to invest the proceeds of WMP’s, in order to shift assets off balance sheets and dodge regulatory constraints on investment in certain sectors or regions.