GlobalData: Chinese HNWIs Prioritize Cash for Safety
High net worth investors in China are wary of the uncertain market environment, preferring to hold significant allocations in cash or cash-like products, according to GlobalData.
Nearly 27 percent of Chinese high net worth individuals’ (HNWI) wealth was parked in cash or near-cash products in 2024, according to a report by GlobalData. This compares to the Asia Pacific average of around 18 percent.
«Despite the Chinese economic recovery in 2024, the country faces significant headwinds,» commented Poornima Chinta, banking and payments analyst at GlobalData. «The escalation of trade war with the US driven by reciprocal tariffs poses the single most significant threat to the Chinese economy in near-term. This has had a significant impact on the Chinese investor psyche and led to an overallocation to safe-haven products.»
Risk Aversion to Persist
While 83 percent of Chinese HNWIs actively sought buying opportunities in equities last year, according to GlobalData’s HNW Asset Allocation Analytics, risk-averse investors are now moving out of the asset class to protect portfolios. They are also expected to maintain cash allocations until uncertainties subside and favorable opportunities arise.
«With readily available liquidity in terms of cash and near-cash allocations, only wealth managers who can anticipate market shifts and position clients ahead of the curve stand to gain significant market share in one of the world's most dynamic wealth markets. Advisors must be prepared to support well-capitalized clients in their search for undervalued assets,» said Chinta.
