The rise of high net worth individuals in China continues unabated, a recent report claims the segment has risen nearly nine fold since a decade ago. But a slowdown is in the works.
The number of mainland Chinese with at least 10 million yuan of investable assets hit 1.6 million in 2016, up from 180,000 in 2006, according to the 2017 China Private Wealth Report by Bain Consulting and China Merchants Bank and reported by news agency «Reuters.»
Sixty-three percent of rich Chinese rely on financial service providers to manage their domestic financial assets and among them about half use private banking services provided by commercial banks.
Outflows Diminishing
As international banks push hard into the rich seam of Chinese wealth, the local banks have also upped their game and are capturing more of their own affluent market while also making moves offshore.
The percentage of HNWIs with overseas investment increased to 56 percent in 2017, up from 19 percent in 2011, but the overall percentage of assets invested overseas has stabilised since 2013.
The top five destinations for overseas investment were Hong Kong, the United States, Australia and Canada although Hong Kong's popularity fell 18 percent and the United States dropped 3 percent from 2015 to 2017.
Slowdown in the Works
However according to the survey the growth rate of China’s private wealth market is expected to decline to 14 percent in 2017 to a total size of 188 trillion yuan.
About 120,000 high net worth individuals had at least 100 million yuan worth of investable assets, up from less than 10,000 people in 2006. Respondents to the survey said their top three reasons for investing overseas were to diversify investment risks, to capture market opportunities of overseas investments and to migrate.
