The China Internet wealth management index has fallen for the first time since 2013, recording a decline of more than 23% amid tighter regulation.
The index, which tracks the size of internet wealth management funds in proportion to the total financial assets held by Chinese citizens, declined to 563 points in 2018, down 23.5% from the peak level of 695 points in 2017, according to Yin Jianfeng, deputy director of National Institute for Finance and Development, local news outlet The Paper reported. It is the index's first fall since its creation, in 2013.
"The development of the internet wealth management market has been negatively impacted by the tightening regulations such as the campaign targeting P2P lending," Jianfeng said at a finance summit hosted by Tencent Holdings in Shenzhen, China.
"The development of the internet wealth management market has been negatively impacted by the tightening regulations such as the campaign targeting P2P lending"
In the two months from June to August, 243 online lending platforms closed amid an intensified crackdown on shadow banking, part of a broader campaign by the central government to reduce risk in the financial system, the SCMP reports.
"Poorly run platforms were forced to withdraw from the market. The numbers and growth have both declined," Jianfeng added. "However, from a longer term perspective, the strict rules will benefit the industry so it can develop in a healthier way."
The total size of the market is growing at a much lower rate than in the previous year, rising to 132trn yuan ($19.11trn) from 130 in 2017. In particular, investment trust, asset management in brokerages and separately managed accounts have fallen by 2, 1.2, and 2.7trn yuan, respectively.