Banks, despite their conservative exterior, had a big hand in shadow financing. They got around caps on deposit rates by funnelling savings into opaque "wealth-management products", a chunk of which flowed through the shadow firms. Some of these products offered yields of over 10%. Yet they enjoyed informal guarantees from the state-owned banks, making investors think that they were as safe as deposits. The shadow-banking industry grew to 28.5% of banks' total assets in 2016.
Around that time a series of messy defaults alerted regulators to the dangers. They began a campaign to unwind the shadow financing. They forced trust companies to hold more capital. They stopped banks from offering guarantees on wealth products. And they opened the door to a new professional fund industry, pressing banks to launch formal wealth-management subsidiaries, rather like asset-management groups in developed markets.
Banks are barred from investing in equities but the new divisions face no such rules. They cannot, however, offer guarantees. Contracts specify that in a downturn investors will face losses. Some banks' wealth units manage their own funds; others team up with outside managers. Much of the money flows into the stockmarket.
The ubiquity of mobile payments has given ordinary people another route to funds. With a few taps users of Alipay or WeChat Pay can choose from hundreds of products. China's 100m or so retail punters have long believed that they can beat professional investors. But that sentiment has shifted over the past two years and many are now buying into mutual funds at record pace, says Desiree Wang of JPMorgan Asset Management. Much as retail investors have been vocal on social media about the performance of individual stocks, they now debate, laud and criticise the performance of the country's top fund managers.
Funds are also becoming more sophisticated. Since the global financial crisis a stream of Chinese nationals has returned to Hong Kong and Shanghai from London and New York, bringing a new set of skills, says Louis Luo of Aberdeen Standard Investments, an asset manager. Funds once limited to plain-vanilla active management have brought in specialists to launch quantitative and absolute-return funds.
基金也变得更为复杂。安本标准投资管理（Aberdeen Standard Investments）的罗勋表示，自全球金融危机以来，大批中国人从伦敦和纽约回流香港和上海，带来一系列新技能。以往只做简单的主动管理的基金公司现在聘雇专家来推出量化绝对收益基金。
These trends have been magnified at China's big mutual funds. Three of the largest mutual-fund companies—China Asset Management, e-Fund and Southern Asset Management—have each surpassed 1trn yuan in assets under management. The rate of growth at mutual funds and at the banks' wealth-management arms is projected to take professionally managed assets in China from around 96trn yuan ($14.7trn) in 2020 to 244trn yuan in 2029, or near the current size of the asset-management industry in America.