As the Chinese middle class becomes increasingly familiar with investing, and the nation’s markets open up to international trading, its mutual fund industry is likely to experience incredible growth, Wall Street & Technology reports.

Assets in China’s mutual fund industry now stand at $275 billion, a mere 3% of the $9.6 trillion invested in mutual funds in the U.S. But as China opens up its markets to international trades and begins to allow new products on the market, such as separately managed accounts, those assets are expected to grow five times to $1.5 trillion by 2012.

China began allowing people to invest in international fixed income and money markets through mutual funds in 2007. Then, in 2008, the QDII directive broadened to allow Chinese citizens to invest in the U.S. stock market through equity funds.

As China’s population ages, its people are likely to continue to save for their older years. As it is, even without the structure of a 401(k) or other defined contribution plan, Chinese save between 30% to 40% of their income. Fearful of stresses on its aging population, the Chinese government is also encouraging people to invest, according to Dayle Scher, research director of investment management at TowerGroup.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.