Young Chinese need to plan for retirement, says insurer

The return expectations of many Chinese investors have dropped while property investment remains a priority among younger investors in terms of financial planning, a survey showed on Thursday.

The expectations for the rate of investment returns have dropped to 7.8 percent this year, down from 8.2 percent last year as Chinese investors become increasingly cautious, according to a survey by Manulife-Sinochem Life Insurance Co Ltd, a Sino-Canadian joint-venture insurer.

Chinese investors have also shown a stronger willingness to invest in cash-related products rather than equities and bonds, reflecting a decreasing risk appetite amid greater economic uncertainty, the survey shows.

Andrew Wang, chief investment officer of Manulife Teda Fund Management Co Ltd, said: "Investors' risk preferences have decreased significantly due to capital market volatility and economic uncertainty. We think it might have come to a turning point."

The survey was conducted between September and October 2016. The results were part of a Manulife-Sinochem annual survey based on 500 online interviews with investors in markets including the Chinese mainland, Thailand, Singapore, Malaysia and the Philippines.

The survey also found that saving for a home is a priority for the millennial  generation－those born between 1983 and 2000－with nearly six out of 10 expressing an intention to buy local property in the next three years.

Xu Yongwei, chief investment officer of Manulife-Sinochem, said: "I think buying property in prime locations in first-tier cities will continue to be a safe investment option for Chinese families."

The survey warned that the millennials in China are overly optimist about their retirement prospects, which may put their long-term financial health at risk.

Only 16 percent of them expected to run out of money in retirement, comparing to a third of investors over the age of 50 who were concerned about running out of money, according to the survey.

Zhang Kai, president and chief executive of Manulife-Sinochem, said: "If younger investors want to maintain their quality of life in retirement, they need to make sure they prioritize retirement planning as early as possible."

She said: "Given the changing market dynamics including an aging population, low interest rates and personal healthcare bills expected to rise fourfold by 2025, it is crucial that younger investors set realistic financial goals."