Anbang Was Seized by China. Now, It Has a Deal for You.
The total outstanding balance of wealth management products issued by Chinese banks was about $4.7 trillion in 2017, up just 1.7
percent from a year before, according to China Wealth, a state-backed company that tracks China’s wealth management products.
By SUI-LEE WEE and ZHANG TIANTIANMARCH 29, 2018
BEIJING — Less than a month after it was seized by the Chinese government, Anbang Insurance Group, the giant conglomerate,
is once again offering small investors “you snooze, you lose” investment opportunities — your money back, guaranteed.
In the last five years or so, retail investors have poured money into wealth management products
that enabled China’s developers to circumvent laws to buy land, “zombie” state-owned enterprises facing overcapacity problems to borrow, and debt-laden local government financing vehicles to take on more leverage.
Wealth management products on paper are not backed by the government,
but state-run banks act as middlemen and sell them to small investors, giving many people the perception that they are.
The real test, according to Mr. Zhu, could come later this year, when wealth management products issued years earlier have to be paid back.
According to data from China’s insurance regulator, Anbang earned $9.2 billion in income derived mostly
from universal life insurance products in January, compared with just $1.3 million a year before.
Still, Anbang and other companies keep selling them — and Chinese investors keep buying them.