Disenchanted Chinese bankers and fund managers are increasingly abandoning their careers in a finance sector plagued by government interventions and stringent regulations, leading some to consider alternative fields such as education and even stand-up comedy as more appealing options.
The financial landscape has become more challenging due to intensified scrutiny of trading practices, financing, and deal-making, alongside a significant decline in stock turnover in a sluggish economy. These factors have severely curtailed private equity and venture capital activities and devastated the market for public stock listings, resulting in pay reductions and job cuts across the sector.
After navigating three years of a stagnant capital market, Xu Yuhe, a partner at Deep Water Fund Management, opted for a more stable career in the educational services sector, focusing on assisting students seeking overseas studies. “Educational services is a stickier business,” Xu explained, as he aims to capitalize on the growing trend of individuals pursuing international experiences in nearby locations like Hong Kong or Singapore, which offer cultural familiarity and affluence.
The $67 trillion financial industry has been significantly impacted by various government initiatives, particularly the “common prosperity” campaign launched in 2021, which aims to address wealth disparities. This campaign has introduced measures such as salary caps and bonus clawbacks that have further unsettled the sector.
Currently, the hedge fund industry is facing a crackdown on quantitative trading strategies, which regulators argue may disadvantage retail investors. This regulatory scrutiny has led to the collapse of thousands of hedge funds over the past year, according to official statistics. Many hedge funds were unable to capitalize on the recent record stock market rally, as data-driven strategies failed to anticipate unexpected policy shifts, resulting in substantial losses on short positions.
Market-supporting stimulus measures are viewed as “very short-term solutions to win the hearts of retail investors,” stated Jason Tan, a director at REForce Group in Shanghai. “I have spoken to enough bankers… They understand that ‘common prosperity’ is here to stay, and the era of high-paying banking jobs has come to an end. As a result, banking talent is increasingly exploring opportunities abroad or transitioning to less regulated industries.”
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