The Comparative Analysis Of Mutual Fund Market Development In China And Taiwan

The development of mutual fund industry in Taiwan began in1983, and1993inChina. Both sides experienced rapid growth in past decades but recent economicenvironment change brought more challenges to prospect of the fund Industry. It’simportant to learn from the past to make a change in the future, mutual fund businessis no exception. Through comparative analysis we expect to come up with realisticsuggestions for environment change and solutions for policy making so that the longterm economic stability for both sides could be achieved through a well developedmutual fund industry.The study utilizes two main approaches to compare and analysis the differencesbetween Taiwan and China fund industry development–the comparative analysis andempirical study. Topics include: fund industry history and milestones, fund marketand financial market, legal environment, business operation, fund size growth, fundperformance, influence on mutual fund industry for both sides under ECFA structure.Overall, China took a “top-down approach” as strategic thinking structure inmost mutual fund research papers. This Shows China’s ambition to continue itsleading role among Asian countries in economic development.“Fund performance” isa typical topic, and ranked on top in terms of research paper numbers among allmutual fund related research topics. By comparing the overall performance, thetiming ability, and stock selection ability, we come up with suggestions for futureimprovement.Though China is lagging behind in mutual fund development, it catches up veryquickly and more flexible in some aspects. The study also come up with severalsuggestions for mutual fund industry’s future operations. They are product innovation,performance commissions for fund managers, developing fixed income products,credit rating introduction, retirement fund and risk control.After20,30years of development, both China and Taiwan has gone beyond therapid growing period when fund size could easily grow. At this critical moment, hopefully through this study, researchers will find it useful for more realistic fundindusty development plan.