Chinese households are increasingly shifting assets from real estate and bank deposits into more lucrative investments at home and abroad, despite growing oversight, Moody’s Ratings said.
A multi-year downturn in the Chinese property market and low interest rates are fuelling the demand for alternative investments, the ratings agency said in a report published this week.
Chinese investors are looking for investments that “offer higher returns than deposits while maintaining relatively low risk,” the authors wrote.
China has increased oversight of citizens’ offshore investments over the past year by stepping up efforts to enforce a 20 per cent capital gains tax on offshore investments.
Growth in offshore investments by Chinese households could “moderate” in the near term as financial institutions onboard customers through more stringent procedures, Moody’s said.
Yet, the ratings agency said these policies were unlikely to dim demand.
“Offshore investments continue to offer a significant yield advantage over domestic alternatives,” the agency wrote.
China has been cutting its benchmark one-year loan prime rate since 2020 to combat slowing economic growth, a downturn in the property sector and disruptions due to the Covid-19 pandemic that have weighed on everything from employment to consumption.
Lower property values reduced the appeal of homeownership, and Moody’s said falling interest rates had prompted domestic banks to cut deposit rates.
At the end of 2022, property accounted for 47 per cent of Chinese household assets and bank deposits stood at 25 per cent, according to the report. Both holdings have trended down since then, it added.
The outstanding balance of mainland Chinese financial products increased by 13.9 per cent in 2024 and 15.5 per cent in 2025, according to a Moody’s estimate, while retail bank deposits rose just 10.4 per cent in 2024 and 9.7 per cent last year.
Bank wealth management products, mutual funds and insurance policies have grown “rapidly” as investment tools, Moody’s added.
The Moody’s report called out Hong Kong as a source of “strong interest” for Chinese investors.
Special schemes such as the Hong Kong-mainland China Stock Connect and Wealth Management Connect offer “regulated channels” for Chinese investors to buy and sell equities and exchange-traded funds in Hong Kong.
Southbound Stock Connect average daily turnover - meaning transactions from the mainland - reached HK$121.1 billion (US$15.4 billion) in 2025, more than double the HK$48.2 billion of 2024, stock market operator Hong Kong Exchanges and Clearing said.
Sales of non-exchange-traded investment products such as pooled investment funds grew by 40 per cent in 2024 and 63 per cent in 2025, according to a survey by the Hong Kong Monetary Authority and Securities and Futures Commission.
High-net-worth investors in Asia-Pacific, including mainland China, were behind the surge in Hong Kong’s asset and wealth management market, the monetary authority said in 2025.
“Demand for offshore assets has materially increased,” the report said.
