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The proportion of wealthy Chinese under 40 years old increased to 49 per cent last year from 42 per cent in 2021, according to a new survey. Photo: AFP
ChinaMoney & Wealth

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

  • China’s high net worth individuals reach 3.16 million in 2022 and they hold a combined 101 trillion yuan in investable assets, survey finds
  • However, compound annual growth of assets falls to 9 per cent, compared to 17 per cent in previous two-year period
China economy
He Huifeng
He Huifengin Guangdong
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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 per cent in 2020-2022, down from 15 per cent 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 per cent in 2018-2020, down from 17 per cent 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 per cent, respectively, over the next two years.

Wealth protection was the top financial goal for affluent Chinese, with 27 per cent of respondents saying it was their top objective, while 17 per cent cited “wealth creation” as their top goal, compared with 18 per cent in 2021.
Affluent Chinese took a more cautious investment approach compared with previous years. A total of 88 per cent of respondents said they had a moderate or low appetite for risk, with 52 per cent saying they sought a moderate rate of return and 36 per cent 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 per cent in cash and 27 per cent in fixed-income products.

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

According to the survey, the proportion of rich Chinese under 40 years old increased to 49 per cent from 42 per cent 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 per cent 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 per cent of respondents indicated they had already set up a family trust, and nearly 50 per cent said they were considering it, while more than 20 per cent of respondents said they did not know how to choose providers for such services.

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