8 minute read
Jie Chang is an Associate General Manager at China Construction Bank Wealth Management Co. Ltd., one of the country’s largest investment-managing institutions. Having previously worked for the Agricultural Bank of China, Jie’s experience covers fixed-income, alternative investment and strategic asset allocation in China’s financial market.
In this interview, he sheds light on the opportunities and challenges in China’s wealth-management industry, and the advantages he gained by completing a Master of Financial Management (with Merit) at the ANU College of Business and Economics (CBE) in 2012.
Q. Why did you choose to study at CBE and how did your degree prepare you for your career?
My father, an entrepreneur and owner of a medium-sized factory in China, inspired me to pursue higher education. Aiming to eventually run the family business from a more modern management perspective, I chose CBE to advance my knowledge about commerce and finance. However, along my CBE journey, I realised that my passion lies in financial markets, so I followed my desires to pursue a career in the finance industry.
As State-Owned-Enterprises (SOEs) are an integral part of China’s economy, working in an SOE financial institute appealed to most graduates, including myself, as an excellent starting point. Most SOE financial institutes target candidates from the top 10 universities within China and the top 100 universities around the world through their recruitment process. While the strong reputation of The Australian National University (ANU) helped me get my foot through the door in this industry, the solid knowledge and critical thinking I developed during my time at CBE proved to be a great advantage.
Q. You’ve recently moved to Shenzhen for a new role with China Construction Bank Wealth Management Co. Ltd. What is a typical day in your job like?
The capital market department that I work in covers MOM (Manager-of-Managers) and FOF (Fund-of-Funds) investments, Asset-backed Security (ABS)/Asset-backed Note (ABN) investments and low-risk capital market investments, such as equity private placements and stock pledged loans.
For me, a typical day at work starts with the morning briefing with MOM/FOF product value movement attribution presentations by investment managers, which focus on predicting short-term market trends. During this meeting, newly issued ABS/ABN assets around the entire Chinese market and tactical allocation with respect to return and risk are discussed.
Throughout the day, appointments are scheduled with representatives from external institutions, including investment banks, mutual fund managers and other branches within the China Construction Bank Group (CCB) to discuss recent market updates and identify upcoming opportunities. We also spend time maintaining regular communication with the CCB headquarters and other internal stakeholders.
Running a business in the midst of a global energy transition and a pandemic certainly brings plenty of lessons from history to mind.
Q. What are some of the current opportunities and challenges in the wealth-management industry in China?
There are plenty of opportunities in today’s China. Firstly, the country’s market is marked by an unprecedented level of openness since its 1978 reforms. Foreign financial institutions are now allowed to establish holding subsidiaries in China, and local top-tier investment management institutions such as China Construction Bank Wealth Management are negotiating with their foreign partners to set up joint-ventures and operate in the Chinese market.
Another noticeable trend points to the fact that as residents’ wealth has quickly accumulated and housing prices have risen to new heights, especially in capital cities, retail investors have developed an increasing appetite for more diverse investment options.
While hard lessons have been learned from the fast-growing yet scandal-plagued P2P (peer-to-peer) lending sector over the last few years, more educated investors are now turning to increasingly credible alternatives. This could drive the expansion of businesses for commercial banks’ wealth management subsidiaries, mutual fund managers and other similar licensed investment managers who are able to meet such needs with innovative yet reliable product offerings.
On the flip side, it is important to acknowledge the challenges ahead of us. One such test lies in the fact that China’s economy is in a transition period, with huge uncertainty regarding international relationships. Tensions between China and the US, for instance, will inevitably introduce additional volatilities in the capital market, with significant influences on the wealth management and investment management sectors.
Financial practitioners must also deal with investor expectations. China’s investors have been far too used to financial products with guaranteed returns, which has been a core feature of products from China’s investment management, such as banks’ wealth managements and trust companies, over the past ten years. This means investors are rewarded with guaranteed excess return over bank deposit rates without bearing additional risks. In other words, such risks are carried by product issuers – the investment managers, who will have to educate and persuade retail investors over time to understand and accept the net-value investment options for a more sustainable and profitable business model going forward.
Q. Could you list three key lessons you have learned so far in your career?
Be curious, never stop learning.
Career development is a marathon instead of a sprint, so focus on your long-term goals.
Develop a professional network with those who you share common goals with.
The ANU College of Business and Economics offers an extensive range of specialised programs. Click here for more details.
Image: Jie Chang