As it seeks the pensions industry in the rapidly ageing country after assuming full control of a joint venture, Canada's Manulife Financial Corp expects at least two further high-level hiring in China this month, according to senior officials.
The largest insurer in Canada has changed the leadership of the division by choosing a new chairman and general manager after becoming the first foreign financial business to get regulatory approval to fully own a funds joint venture in November.
It is currently searching for two new positions that it expects to fill by the end of March: a chief operational officer and a deputy general manager for fixed income.
According to Paul Lorentz, CEO of Manulife Investment Management (Manulife IM), having 100% ownership of a local entity with access to China's recently established private pension scheme will enable Manulife speed its efforts to capture the retirement market opportunity.
"There's a massive retirement funding gap (in China), particularly relative to other developed markets," said Lorentz. "I think we have an opportunity to really help the government, the regulator, shape the industry."
One state-sponsored academic organisation in China has warned that the public pension system may run out of money by 2035 as a result of the country's dwindling and rapidly ageing population.
For the first time in 61 years, China's 1.4 billion people decreased in population last year. By 2035, the cohort of individuals aged 60 and older is predicted to increase from 280 million to more than 400 million, equaling the combined current populations of Britain and the United States.
As per Lorentz, China's pension assets as a percentage of its GDP are 10%, which is significantly lower than the United States' ratio of 171%.
China launched a private pension system in November, allowing people to register retirement accounts at banks and purchase pension products including mutual funds and deposits, in an effort to fix some of the flaws in the public and corporate safety nets.
Many foreign financial companies have qualified to take part in the programme, and several of them, including JPMorgan, Warburg Pincus, and UBS ventures in China, are preparing to increase their retirement products in the $3.94 trillion funds market there.
With mutual fund assets managed by the joint venture expanding by over 30% last year, China was already a bright area for Manulife. Due to unstable markets, its assets under management decreased by 8% globally to $745 billion in 2022.
To grow private pension assets is "a primary focus" for the firm in China, and "the growth of that will be enormous", said Michael Dommermuth, the company’s head of wealth and asset management in Asia.