Beijing, August 22, 2025 – Against the backdrop of rapid evolution in global financial markets, China has officially replaced Japan as Asia’s largest exchange-traded fund (ETF) market. This milestone achievement signifies the deepening development and growing maturity of China’s financial markets, while also injecting strong momentum into the ETF ecosystem of the Asia-Pacific region.

According to the latest data, the asset management scale of China’s ETF market has reached $681 billion, slightly higher than Japan’s $668 billion. This overtaking not only consolidates China’s leading position in the Asia-Pacific region but also gives the overall Asian ETF market a competitive edge over Europe.

Industry experts point out that the rapid growth of China’s ETF market is driven by a combination of factors, including policy support, investor education, and product innovation.

Bloomberg Intelligence’s ETF team predicted in a recent report that China will become a key growth engine for Asia’s ETF market over the next decade. By 2035, the asset management scale of Asia’s ETF market is expected to soar to $8 trillion, surpassing Europe’s current level. The team emphasized that strong policy support for the ETF market, along with the significant potential for increased adoption by retail investors, will drive record-high capital inflows and attract more foreign institutions. This will not only enhance market liquidity but may also further stimulate the internationalization of China’s capital markets.

The rise of China’s ETF market did not happen overnight but stems from a series of reforms in recent years. For example, regulators have actively promoted the diversification of ETF products, covering multiple asset classes such as stocks, bonds, and commodities, while also encouraging the launch of innovative ETFs like enhanced index and cross-border ETFs. These changes have attracted a large number of domestic and international investors, driving the market’s shift from institution-dominated to broader retail participation.

Among the many Chinese ETF products, several key ETFs have become market benchmarks and investor favorites. Below is a list of some important China market ETFs that stand out for their size, liquidity, and representativeness (data based on mid-2025 estimates):

• ChinaAMC SSE 300 ETF, which tracks China A-share core blue-chip stocks, is highly liquid and serves as a market bellwether;

• Southern China Securities 500 ETF, which covers mid-cap growth stocks;

• E Fund A500ETF (159361), which tracks the top 500 companies in China’s A-share market, emphasizes high-quality development and technology orientation, and has seen strong capital inflows in recent years;

• Harvest CSI Hong Kong Select ETF, which connects the mainland and Hong Kong markets and attracts foreign investment interest.

These ETFs not only represent the diversity of the Chinese market but also reflect investors’ coverage of different risk preferences. Among them, E Fund A500ETF (159361), as a relatively new product, has rapidly accumulated scale since its launch. Its tracked CSI A500 Index focuses on high-tech, new energy, and consumption upgrade sectors, reflecting the direction of China’s economic transformation. The ETF’s low fee ratio and efficient tracking performance make it a popular choice for both retail and institutional investors.

Looking ahead, the expansion of China’s ETF market will further benefit from the popularity of digital platforms and the optimization of the regulatory environment. Experts warn that although the outlook is optimistic, geopolitical risks and global economic volatility may still pose challenges. However, with the emergence of more innovative products, such as sustainable development and ESG-themed ETFs, China is expected to continue leading Asia’s ETF race and provide more opportunities for global investors.

This shift is not only a symbol of China’s financial strength but also signals the rise of Asia as a global asset allocation hub. Investors and policymakers are closely watching this dynamic to seize potential investment waves.