Key Points
- China’s ETF market has surpassed Japan to become the largest in Asia, reaching $640.6 billion USD (¥4.6 trillion RMB) in AUM by July 2025.
- Total domestic ETF scale in China grew by over $165.5 billion USD (¥1.2 trillion RMB) within 2025 to $685.2 billion USD by August 22, driven by both market appreciation and net new units.
- Bond ETFs experienced significant growth, expanding by 218.26% from $24 billion USD at the end of last year to $76.4 billion USD by August 2025.
- Key drivers for this growth include purchases by state-backed entities (“national team”), supportive regulatory reforms leading to faster product approvals, and a diversified product structure unlike Japan’s stock-heavy market.
- Regulators are implementing a fast-track registration mechanism for ETFs, aiming to complete approvals within 5 working days, which is expected to increase listed products and attract foreign market makers.
China ETF market just climbed to the top of Asia’s ETF leaderboard, and the implications are real for investors, founders, and market makers.
Quick snapshot — China now #1 in Asia for ETF AUM
By the end of July 2025, China’s ETF assets under management (AUM) reached $640.6 billion USD (¥4.6 trillion RMB).
Japan’s ETF AUM at the same point stood at $622.3 billion USD (¥4.47 trillion RMB).
This is the first time China has overtaken Japan to become the largest ETF market in Asia, marking a major structural milestone.
Resume Captain
Your AI Career Toolkit:
- AI Resume Optimization
- Custom Cover Letters
- LinkedIn Profile Boost
- Interview Question Prep
- Salary Negotiation Agent
How fast did China scale in 2025?
As of August 22, 2025, the total scale of domestic ETFs in China hit $685.2 billion USD (¥4.97 trillion RMB).
That’s up from $514.8 billion USD (¥3.73 trillion RMB) at the end of 2024 — an increase of over $165.5 billion USD (¥1.2 trillion RMB) within the year.
Market appreciation (NAV growth) plus net new units both contributed to the surge.
The number of domestic ETF units increased by 137.574 billion units this year, while total AUM rose by $170.1 billion USD (¥1234.328 billion RMB).
Where the money flowed — sector and product trends
Industry-themed ETFs led net inflows over the past month with $7.39 billion USD (¥53.41 billion RMB).
Bond ETFs were second, recording net inflows of $6.24 billion USD (¥45.19 billion RMB).
Within industry ETFs, financial and real estate strategies attracted the most capital.
Broad-based ETFs, by contrast, saw the largest net outflow at $10.18 billion USD (¥73.76 billion RMB).
Find Top Talent on China's Leading Networks
- Post Across China's Job Sites from $299 / role, or
- Hire Our Recruiting Pros from $799 / role
- Qualified Candidate Bundles
- Lower Hiring Costs by 80%+
- Expert Team Since 2014
Your First Job Post
Equity ETFs and bond ETFs — different growth stories
Equity ETFs (including stock ETFs and cross-border ETFs) grew by nearly $110.3 billion USD (¥800 billion RMB) this year.
The latest equity ETF AUM surpassed $551.4 billion USD (¥4 trillion RMB), a record high.
Bond ETFs experienced a dramatic expansion from $24 billion USD (¥173.973 billion RMB) at the end of last year to $76.4 billion USD (¥553.692 billion RMB) as of August 22, 2025 — a 218.26% increase.
The first batch of Sci-Tech Innovation Bond ETFs, listed just a month ago, already exceeded $13.8 billion USD (¥100 billion RMB) in total AUM.
ExpatInvest China
Grow Your RMB in China:
- Invest Your RMB Locally
- Buy & Sell Online in CN¥
- No Lock-In Periods
- English Service & Data
- Start with Only ¥1,000
Why China’s ETF market is growing — structural drivers
Purchases by the “national team” — state-backed entities such as Huijin (汇金) have stepped in with significant purchases that helped reverse market sentiment.
Regulatory tailwinds — faster product approvals and supportive reforms are accelerating ETF launches and broadening product choice.
Market maturation — a rising share of institutional investors in A-shares, improving market efficiency, and the difficulty of generating alpha drive allocation to ETFs.
Diversified product structure — China’s ETF market mixes equity, bond, money market, and cross-border ETFs, unlike Japan’s heavier concentration in domestic large-cap equity.
China vs Japan — timelines and structure
Japan’s first ETF launched in 1995.
Japan took 20 years to reach $100 billion USD and 30 years to reach $600 billion USD.
China launched its first ETF in 2004, reached $100 billion USD in 15 years, and reached $600 billion USD in 21 years.
Japan’s ETF market remains concentrated in stocks — stock ETFs account for 96.86% of total AUM.
In Japan, large-cap blended and growth stock exposures dominate, and alternative exposures are relatively limited.
China’s ETF structure is more layered: stock ETFs make up 70.11% of AUM, but bond, money market, and cross-border ETFs are meaningful complements.
What regulators are doing — faster approvals and new product pathways
Reform guidance such as the “Action Plan to Promote High-Quality Development of Public Funds” aims to optimize registration arrangements for equity funds.
ETFs are set to benefit from a fast-track registration mechanism that generally completes registration within 5 working days of acceptance.
This faster approval process should increase listed products, attract foreign market makers, and broaden retail adoption of ETFs as long-term, low-cost, liquid funds.
Product gaps and future upside
China’s ETF market still lacks a wide supply of actively managed, derivatives-based, leveraged, inverse, and cryptocurrency ETFs.
As regulators greenlight more product types, these segments could unlock additional AUM and trading volumes.
The current environment suggests more product innovation is likely as market demand and approval speeds increase.
Market impact — liquidity, pricing, governance
Passively managed funds and ETFs are reshaping A-share pricing power.
ETFs help improve market liquidity, smooth price discovery, and can indirectly push for better governance among listed companies.
That makes ETFs not just allocation vehicles, but structural participants in market development.
Actionable takeaways for investors, founders, and market participants
- For investors: consider mixing equity and bond ETFs to capture China’s expanding product set and growing liquidity.
- For asset managers & founders: product innovation in active ETFs, derivatives-based ETFs, and cross-border strategies could meet unmet demand.
- For foreign market makers: improving approval speeds and rising AUM make China an attractive venue to provide liquidity and capture spreads.
- For marketers: educate retail investors on long-term, low-cost, and liquid ETF strategies — the market is primed for adoption.
- Yin Hao (Bosera Asset Management): Attributes equity ETF growth to the maturation of China’s capital market and rising institutional participation.
- Huatai-PineBridge Fund Management: Notes that ETFs are reshaping market pricing and enhancing liquidity and stability.
- China Securities Investment Co., Ltd. (CSC): Expects China to set new Asia-Pacific records for ETF AUM, capital inflows, liquidity, and product offerings in the coming years.
Expert voices — what industry managers are saying
Yin Hao (尹浩), a fund manager at Bosera Asset Management’s (博时基金) Index and Quantitative Investment Department, attributes equity ETF growth to the maturation of China’s capital market and rising institutional participation.
Huatai-PineBridge Fund Management Co., Ltd.’s (华泰柏瑞基金) Index Investment Department notes that ETFs are reshaping market pricing and enhancing liquidity and stability.
China Securities Investment Co., Ltd. (Zhongxin JianTou 中信建投) expects China to set new Asia-Pacific records for ETF AUM, capital inflows, liquidity, and product offerings in the coming years.
Bottom line
China’s ETF market just became the largest in Asia, driven by AUM growth, regulatory support, and diversified product uptake.
That shift opens concrete opportunities for investors, product builders, and international market participants looking to tap a fast-evolving ETF ecosystem.
China ETF market
![The Stock Connect Effect: Jaw-Dropping Surges Meet Sobering Data on Pullback Risks [FreshFromChina]](https://freshfromchina.com/wp-content/uploads/2025/05/the_stock_connect_effect_jaw_dropping_surges_meet_sobering_data_on_pullback_risks.png____FreshFromChina-150x150.png)
