It has been a tough six months for China's fund managers. After posting record growth in 2007, the Olympic year has proved far less kind. Mutual funds and equity funds have suffered rapid declines, and their managers have seen investors running for cover. As it enters its tenth year, however, China's funds industry remains as enticing as any in China's financial services sector. Despite recent downturns in mainland China's two stock exchanges, asset management continues to grow in importance. Chinese consumers are searching, in record numbers, for investment vehicles to help meet retirement and insurance needs - since the breaking of the "Iron Rice Bowl," China's old system of guaranteed employment and benefits - and are turning to asset management firms to realize the true value of their capital assets. The year 2007 set a record for China's decade-old fund management industry, with assets under management more than tripling from US$125 billion to US$457 billion at the beginning of 2008. The funds have lost value so far this year, but the McKinsey Quarterly predicts that assets under management will rise at a rate of nearly 25 percent annually for the next decade - making asset management the fastest-growing segment of financial services in China.
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