Chinese private wealth to steadily climb, despite economic slowdown, survey suggests
Chinese individuals’ private wealth will reach a total of 110 trillion yuan (HK$133 trillion) by the end of this year and increase by 80 per cent in five years despite slowing growth in the economy, a study suggests.
The compound annual growth rate of private wealth – including cash, stocks and other financial investments, but not real estate, collectibles, business ownership or luxury goods – is expected to reach 21 per cent in the three years from 2013, according to the report released by the Boston Consulting Group.
“[The strong growth in private wealth] is driven by relative high GDP growth, demographic dividend and accelerated development of the capital market,” said the study, which is focused on the mainland’s private banking sector and was jointly released with the China Industrial Bank.
The mainland enjoyed a “demographic dividend” in the past because of its abundant cheap labour, which has been gradually exhausted as the population ages.
Although economic headwinds would slow growth of private wealth at about 13 per cent annually in the next five years, the total amount was expected to reach 196 trillion yuan by 2020, it said.
The study interviewed 1,265 high-net-worth individuals, who have investable assets of more than 6 million yuan.
The number of high-net-worth households, which hold 41 per cent of the mainland’s total private wealth, grew substantially in the three-year period at about 30 per cent a year and is estimated to reach two million households by the end of this year.
The growth rate of this group will also slow down to an annual 11 per cent in the next five years to 3.46 million households in 2020, following the transformation of the mainland’s economy, the report said.
However, the growth in private wealth will drive investment needs that will benefit the private banking segment.
“Chinese high-net-worth individuals’ needs [for investment] have become more diversified and complicated,” the report said, and there was rising interest in equities market investment.
More than half of the respondents said they are interested in stocks in their investment plan for next year, the report said. Private equity and venture capital have also emerged as a new hot pick for this group, with 28 per cent of respondents saying they planned to make such investments, the study said.
