The outstanding value of Chinese household’s saving diverted to wealth-management products in the first half of 2014 stood at CNY12.7 trillion (US$2.1 trillion), a surge of 24% in the first half from the end of last year, the China Banking Wealth Management Registration System said on its website.
The rise is despite the fact the government is trying to manage risks from an explosion in shadow banking.
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Products issued by the Chinese banks offered an average annualized return of 5.2% to investors, much higher than the maximum 3.3% interest rate banks can provide on their one-year deposits, The Wall Street Journal reported citing the report.
The report also said that 31% products due during the first six months led to losses, which accounted for only 0.04% of the total products met their maturities in the same period.
The maturity of most wealth-management products issued in the first six months is within six months and investors have favored those with low risks, the latest report added.
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