In Depth: Behind the Massive Sell-Off in Chinese Wealth Management Products

By Wang Shiyu, Quan Yue, Wang Juanjuan, Wu Xiaomeng and Kelsey Cheng

Many retail investors in China are only now learning about the risks of investing in wealth management products, after plunging values triggered by the onshore bond market rout stoked panic. Photo: VCG

When Li Ming put around 10,000 yuan ($1,450) in a wealth management product (WMP) in November, he expected nothing short of a fool-proof investment. But within just a few days, local bond market turmoil led to plunging values of WMPs, which had invested heavily in bonds, stoking panic among retail investors including Li.

“It’s supposed to be a low-risk WMP, and I have never taken a loss from such products before,” he told Caixin in late November. “I might as well have deposited the money into my bank account.”