As the Mainland banking sector becoming increasingly open and competition becomes fierce, commercial banks need to develop the private wealth management aspects of their business in order to benefit from the booming economy and national wealth.  However, in order to do so,  banks will have to overcome several hinderances, including a lack of variety in wealth management products, shortages of professionals skilled in wealth management, and an unsatisfactory information system.

The Bureau of Statistics recently announced that China’s real estate sector has received 16.7 billion yuan (US$2.087 billion) in foreign investment during the first half of 2006, which is an increase of 32.5% year-on-year. The volume saw a 46.6% increase in the first three quarters to 25.9 billion yuan (US$3.24 billion). To a certain extent, stronger macro controls have not dampened the interest of foreign investors in China’s real estate sector.   Some experts claim it created an even better investment environment since they are assured of lower investment risk and higher investment return.

In the past month, the banking and finance regulatory commission lifted barriers to enable banks to engage in stock funds and insurance businesses while insurance firms can directly invest in the stock market and acquire stakes in banks. This unveils the key changes in a fully opened finance sector. Financial institutions on the Mainland can have a more diverse mix of operations in securities, banking and insurance.