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Our growth opportunity in China
Our business |Author Beng Neoh
20 February 2018
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At AMP, we have been clear that China is a key market as we deliver our growth strategy, and continue to expand internationally.

Our strategic partner, China Life, is the largest listed life insurance company in the world. Through this partnership, AMP has established two very successful and rapidly growing joint ventures – China Life Pension Company (CLPC) and China Life AMP Asset Management (CLAMP).

With the Chinese population aged 65 and over expected to rise to over 340 million by 20501, we see an enormous opportunity for growth, and are targeting earnings of around A$50m per annum from the China businesses within five years.

AMP has a long history of leading the Australian financial services sector in China:

  • AMP was the first Australian company to invest directly in the Chinese A-share equity market
  • the first to sign a memorandum of understanding with China Life in funds management and pensions in 2009
  • the first foreign institution to establish a joint venture in mainland China in funds management with a Chinese insurer in 2013
  • and the first and only foreign company in the world to become a strategic shareholder of a Chinese pension company.
What are these joint ventures?

In 2015, we became the first foreign company to invest in a Chinese pension company, taking a 19.99% stake in China Life Pension Company.

CLPC is a market leader in China’s pension market with over 30% market share in the trustee segment.

"China Life Pension Company’s AUM passed the A$100 billion mark in 2017"

Through the CLPC joint venture, we share our 169 years’ experience in investment, financial advice, and superannuation expertise in China.

There’s also an exciting opportunity emerging for CLPC as the Chinese Government adopts a pensions approach modelled on Australia’s superannuation system. This process opens up a market of 40 million civil servants in China, with tenders already underway in several provinces.

CLPC is well positioned to further benefit from an expansion of retail pensions in China and retirement age reforms. For a number of reasons, including: improved health, longer life expectancy and a stronger desire to travel, there is a changing expectation of increased self-sufficiency in retirement. These factors and the previous one-child policy mean many adults must now better plan for their retirement and cannot exclusively rely on the combination of a Pillar 1 pension and their child to support them to realise their retirement dreams.

Our funds management joint venture, CLAMP, is also going from strength to strength and is one of the fastest growing new funds management companies in China. In only its fourth year of operation, its AUM grew 59% (in local currency terms) to RMB183.3 billion, which is approximately A$36 billion.

The future looks bright for CLAMP, with increased efforts and focus to encourage the development of local capital markets. Signs are pointing to strong growth in the asset base of local institutional investors like insurance companies and pension companies, which are looking to invest internationally.

The growth opportunity in China is tremendous and there is a strong outlook for our joint ventures. Through close collaboration with our strategic partner China Life, AMP is well placed for the future.

 

Beng Neoh is the Managing Director, North Asia, AMP Capital. 

1 https://www.census.gov/content/dam/Census/library/publications/2016/demo/p95-16-1.pdf

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