Rich Chinese and their wealth increasing at slower rate, with higher proportion under age 40

Share

Share

Affected by the economic downturn, the number of High Net Worth Individuals (HNWIs) in China and the value of their investable assets grew at a slower rate than in previous years, according to a new survey.

The number of HNWIs in China – those with individual investable assets in excess of 10 million yuan (US$1.38 million) – reached 3.16 million last year, an increase of about 540,000 compared with 2020, according to China Private Wealth Report, jointly published by Bain & Company and China Merchants Bank on Friday.

That amounts to a compound annual growth rate (CAGR) of 10 percent in 2020-2022, down from 15 percent in 2018-2020, said the report, which surveyed around 4,000 Chinese HNWIs.

Chinese HNWIs held a total of 101 trillion yuan in investable assets in 2022, with a CAGR of 9 percent in 2018-2020, down from 17 percent in 2018-2020. The group’s per capita holdings of investable assets stood at around 31.83 million yuan.

The report predicted that the number of wealthy Chinese and their investable assets would grow at a CAGR of around 11 and 12 percent, respectively, over the next two years.

Wealth protection was the top financial goal for affluent Chinese, with 27 percent of respondents saying it was their top objective, while 17 percent cited “wealth creation” as their top goal, compared with 18 percent in 2021.

Affluent Chinese took a more cautious investment approach compared with previous years. A total of 88 percent of respondents said they had a moderate or low appetite for risk, with 52 percent saying they sought a moderate rate of return and 36 percent saying they would be fine with a rate of return that was higher than the domestic deposit rate.

More than half of the domestic investable assets of Chinese HNWIs were allocated to lower-risk assets, including 28 percent in cash and 27 percent in fixed-income products.

Corporate financing planning was the top business need for affluent Chinese, selected by 58 percent of respondents, followed by domestic investment planning at 37 percent, planning for overseas equity, debt, and real estate at 27 percent, and IPO planning at 21 percent.

According to the survey, the proportion of rich Chinese under 40 years old increased to 49 percent from 42 percent in 2021.

Looking forward to the next two years, Chinese HNWIs plan to increase their insurance allocation as well as increase private equity investments and alternative investments such as gold while reducing their real estate investments, according to the report.

The survey found that more than 70 percent of Chinese HNWIs were preparing to transfer wealth to heirs, mainly in the form of insurance and real estate, and then gradually expand to family trusts.

More than 20 percent of respondents indicated they had already set up a family trust, and nearly 50 percent said they were considering it, while more than 20 percent of respondents said they did not know how to choose providers for such services.

Share

Latest

Related Content

Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

Media Kit

    Data Protection

    The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

    The Digital Banker Summit

    Moving on from FTX: is 2023 the year of CBDCs?

    Indonesia, Jakarta

    Thailand, Bangkok

    Philippines, Manila

    Contact Us

      Data Protection

      The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

      Request Nomination Pack

      Error: Contact form not found.

      The world’s preeminent Private Banks and Wealth Managers are demonstrating a committed drive in innovation, advisory, new products and services to meet the sophisticated needs of their clients.

      COVID-19
      Amid economic activity revival on the back of the Covid-19 vaccine program, organisations moving from business continuity plans to stable working environments, together with the slightest improvement in unemployment numbers, forced the world to adjust to new realities. Coming to terms with the “new normal”, global investors are now on the look-out for attractive and stable investment opportunities.

      Needs of Private Wealth customers and families worldwide have drastically changed due to the pandemic and banks have had to accelerate efforts to deploy a multi-channel service strategy and safeguard clients’ businesses and wealth against negative impacts of economic uncertainly.

      The Global Private Banking Innovation Awards will recognise the world’s best private banks, wealth managers and asset managers that are championing innovation across advisory, service, products, customer experience and more.

      Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. 

      Request Nomination Pack

      Error: Contact form not found.