Structured products may be taking the lead in transforming China’s asset management industry, but challenges lie ahead as the business still remains niche. The second part of this two-part feature looks at how shadow banking is still present in the local financial sector.

Despite a recent slowdown in shadow lending, wealth management products (WMPs) with implicit guarantees of principal and coupons remain very much a part of China’s asset management space, as reported in the first part of this feature. This is inevitable in China, according to an equities department managing director at one of the biggest local securities houses, because of huge demand from both the financing as well as the investor sides. “The credit-linked fixed income notes match

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