Shanghai's continued efforts to develop the asset management industry, driven by enriched product supply and optimized financial infrastructure, will facilitate the country's high-quality economic growth and further consolidate the city's role as a global financial center, said analysts and experts.

Their comments were regarding the set of guidelines released by the Shanghai municipal government on Tuesday, which set the target of a 55-trillion-yuan ($8.1 trillion) asset management market in the city by 2030. This value will equal one-third of the country's total by that time, making asset management a new landmark of Shanghai.

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To better achieve the goals, Shanghai will enrich the high-quality product supply of basic assets, futures and derivatives. This will not only meet the investment demand of the asset management industry but also help make yuan-denominated assets more attractive to international investors. Asset managers are encouraged to serve the new quality productive forces, which in turn will facilitate the maturity of the asset management industry, said the guideline.

Liu Jun, deputy general manager of Huatai-PB Investments, pointed out that homogeneous competition is already an unavoidable issue for the entire asset management industry in China. While financial service providers are lowering their fees amid lower interest rates, they can only stand out among their peers by sufficiently enlarging their product supply, Liu said.

While technologies are making leapfrogging progress, asset managers can only seek abnormal returns by reaching into the technology frontiers, said Li Hao, chairman of BOCOM Wealth Management Co Ltd.

Against that backdrop, asset managers should conduct in-depth research in pioneering industries so that they can build diversified and cross-disciplinary asset allocation system, he said.

Efforts will be made to cultivate and introduce a number of leading asset managers from home and abroad to form a complete industrial cluster. Meanwhile, these institutions should seek differentiated development paths so that they can allocate resources in diversified ways, according to the new guideline.

According to the new plan, the various cross-border asset allocation channels should feature higher levels of convenience and efficiency. Specific practices include adding real estate investment trusts into the connectivity program between Shanghai and Hong Kong, better connecting and opening-up the interbank and exchange-based bond markets, and further opening-up the gold market.

Meanwhile, the qualified foreign institutional investor mechanism should be optimized, making more futures and options accessible to these investors. Qualified domestic institutional investors should better meet Chinese domestic investors' overseas investment demand.

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A mature and open asset management market can attract global funds to attach greater importance to yuan-denominated assets, whose investment and reserve functions can be thus further improved. This will help consolidate the foundation for the ongoing internationalization of the Chinese currency, said Ge Qing, director of the macroprudential management department at the PBOC Shanghai head office.

Jean Lu, CEO and executive vice-chairperson of Standard Chartered Bank (China) Ltd, further explained that the internationalization of the RMB, if measured by a currency's asset allocation and reserve currency functions, still does not match China's weight in the global economic and financial system.

"This is precisely the gap that Shanghai's global asset management center initiative seeks to close — ensuring that overseas institutions not only have channels to allocate RMB assets, but also have the tools to manage risks and the scenarios to sustain long-term usage," she said.

Contact the writers at shijing@chinadaily.com.cn