China 2013 Wealth Book

Date: October 31, 2013
Pages: 110
Price:
US$ 4,995.00
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Publisher: WealthInsight
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: CA92FEC00B4EN
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China 2013 Wealth Book
SYNOPSIS
  • This report is the result of WealthInsight’s extensive research covering the high net worth individual (HNWI) population and wealth management market in China.
  • The report focuses on HNWI performance between the end of 2007 (the peak before the global financial crisis) and the end of 2012. This enables us to determine how well the country’s HNWIs have performed through the crisis.
SUMMARY

There are 1.4 million HNWIs and 9,087 UHNWIs in China in 2012. This report reviews the performance and asset allocations of HNWIs and Ultra HNWIs in Peru highlights top-performing cities. It also includes an evaluation of the local wealth management market.

SCOPE
  • Independent market sizing of China HNWIs across five wealth bands
  • HNWI volume, wealth and allocation trends from 2008 to 2012
  • HNWI volume, wealth and allocation forecasts to 2017
  • HNWI and UHNWI asset allocations across 13 asset classes
  • Geographical breakdown of all foreign assets
  • Alternative breakdown of liquid vs. investable assets
  • Number of UHNWIs in major cities
  • Number of wealth managers in each city
  • City wise ratings of wealth management saturation and potential
  • Details of the development, challenges and opportunities of the Wealth Management and Private Banking sector in China.
  • Size of China's wealth management industry
  • Largest domestic private banks by AuM
  • Detailed wealth management and family office information
  • Insights into the drivers of HNWI wealth.
REASONS TO BUY
  • The WealthInsight Intelligence Center Database is an unparalleled resource and the leading resource of its kind. Compiled and curated by a team of expert research specialists, the database comprises dossiers on over 60,000 HNWIs from around the world.
  • The Intelligence Center also includes tracking of wealth and liquidity events as they happen and detailed profiles of major private banks, wealth managers and family offices in each market.
  • With the Database as the foundation for our research and analysis, we are able obtain an unsurpassed level of granularity, insight and authority on the HNWI and wealth management universe in each of the countries and regions we cover.
  • Report includes comprehensive forecasts to 2017.
  • Also provides detailed information on UHNWIs in each major city.
KEY HIGHLIGHTS
  • There were just over 1.4 million HNWIs in China in 2012, holding US$5.2 trillion in wealth, equivalent to 27% of country’s total individual wealth.
  • The number of HNWIs in China increased by around 89.9% during the review period from 779,896 HNWIs in 2008 to 1,481,363 HNWIs in 2012. Local HNWI wealth also increased by 171%, from US$2.5 trillion in 2008 to US$5.2 trillion in 2012
  • Equities recorded the strongest growth over the review period. Driven by a strong local residential market, real estate also grew strongly.
  • There were 9,087 UHNWIs in China, with an average wealth of US$1.3 billion per person, making them the prime target group for wealth sector professionals. Of this total, there were 195 billionaires, 3,121 centimillionaires and 5,771 affluent millionaires.
  • In 2012, Chinese HNWIs held 12.6% (US$658 billion) of their wealth outside their home country, which is slightly lower than the global average of 20−30%.
1 INTRODUCTION

1.1 Details of this Report
1.2 Definitions

2 EXECUTIVE SUMMARY

3 WEALTH SECTOR FUNDAMENTALS

3.1 Political Background
3.2 Economic Background
3.3 Social Background
3.4 Benchmarking China Wealth in Context
  3.4.1 World statistics
  3.4.2 Distribution of wealth in China
3.5 HNWI Volume and Wealth Trends

4 FINDINGS FROM THE WEALTHINSIGHT HNWI DATABASE

4.1 Trends in HNWI Wealth to 2017
  4.1.1 HNWI trend analysis
  4.1.2 Trends of the wealth bands
  4.1.3 Demographic breakdown of HNWI
  4.1.4 HNWIs – job titles
  4.1.5 HNWIs – industry breakdown
  4.1.6 HNWIs – industry performance
  4.1.7 HNWI breakdown by city
  4.1.8 HNWIs – city performance
  4.1.9 HNWIs – city population densities
  4.1.10 HNWIs – city forecasts
4.2 UHNWIs
  4.2.1 UHNWI volume trend analysis
  4.2.2 UHNWI wealth trend analysis
  4.2.3 Demographic breakdown of UHNWIs
  4.2.4 UHNWIs – sector breakdown
  4.2.5 UHNWIs – City breakdown and performance
4.3 UHNWIs – Billionaires
  4.3.1 Billionaire volume trend analysis
  4.3.2 Billionaire wealth trend analysis
  4.3.3 Billionaire per capita net worth trend analysis
  4.3.4 List of billionaires
4.4 UHNWIs – Centimillionaires
  4.4.1 Centimillionaire volume trend analysis
  4.4.2 Centimillionaires wealth trend analysis
  4.4.3 Centimillionaires per capita net worth trend analysis
4.5 UHNWIs – Affluent Millionaires
  4.5.1 Affluent millionaire volume trend analysis
  4.5.2 Affluent millionaire wealth trend analysis
  4.5.3 Affluent millionaire per capita net worth trend analysis
4.6 Core HNWIs
  4.6.1 Core HNWI volume trend analysis
4.7 Core HNWIs – Mid-Tier Millionaires
  4.7.1 Mid-tier millionaire volume trend analysis
  4.7.2 Mid-tier millionaire wealth trend analysis
  4.7.3 Mid-tier millionaire per capita net worth trend analysis
4.8 Core HNWIs – Lower-Tier Millionaires
  4.8.1 Lower-tier millionaire volume trend analysis
  4.8.2 Lower-tier millionaire wealth trend analysis
  4.8.3 Lower-tier millionaire per capita net worth trend analysis

5 ANALYSIS OF CHINESE HNWI INVESTMENTS

5.1 Analysis by Asset Classes
  5.1.1 Trends in alternative assets
  5.1.2 Trends in “art, wine and wheels”
  5.1.3 Trends of investments in real estate
  5.1.4 Trends of investments in cash and deposits
  5.1.5 Trends of investments in fixed-income
  5.1.6 Trends of investments in equities
  5.1.7 Trends of investments in business interests
5.2 Analysis of Foreign Investments
  5.2.1 Investments in Europe
  5.2.2 Investments in North America (Including the US, Mexico and the Caribbean)
  5.2.3 Investments in Asia-Pacific
  5.2.4 Investments in South America
  5.2.5 Investments in the Middle East
  5.2.6 Investments in Africa
5.3 Alternative Breakdown: Liquid vs Investable Assets
5.4 Analysis of Chinese UHNWI Investments

6 COMPETITIVE LANDSCAPE OF THE WEALTH SECTOR

6.1 Competitive Landscape
  6.1.1 Private Banks
  6.1.2 Wealth managers
  6.1.3 Family Offices
  6.1.4 Single-family offices
  6.1.5 Financial advisors
6.2 Developments in China’s Private Banking Industry
6.3 Wealth Management Industry – Clientele Model and Maturity
6.4 Behavioral Mapping of Wealth Management and Private Banking
6.5 Porter’s Five Force Analysis – The Chinese Wealth Management Industry
6.6 Financial Services Review
  6.6.1 Retail banks
  6.6.2 Hedge funds

7 APPENDIX

7.1 Additional Components of the Wealth Sector in China
  7.1.1 Philanthropy
  7.1.2 Demand for Intergenerational Wealth Transfer
  7.1.3 Human Resource Availability for the Wealth Management Industry
7.2 Regulations on Taxes
7.3 Regulations Related to Immigration, Investment and Employment
7.4 Economic Indicators
  7.4.1 CNY to US$ exchange rate
  7.4.2 Real GDP growth
  7.4.3 Per capita GDP
  7.4.4 Domestic market capitalization
  7.4.5 Commodity index
  7.4.6 Foreign direct investment
  7.4.7 Inflation rate
  7.4.8 Interest rate
  7.4.9 Balance of payments
  7.4.10 Government debt
  7.4.11 Stock market performance
  7.4.12 Wealth Breakdowns

8 ABOUT WEALTHINSIGHT

LIST OF FIGURES

Figure 1: HNWI Wealth Band Definitions
Figure 2: Map of China
Figure 3: China: Asset Price Performance, 2008–2012
Figure 4: China HNWI Performance, 2008–2017
Figure 5: Chinese HNWIs vs the World
Figure 6: China HNWIs – Growth Factor Correlation, 2008–2012
Figure 7: Chinese HNWIs – Volume Distribution Wealth Pyramid, 2012
Figure 8: Chinese HNWIs – Wealth Distribution Wealth Pyramid (Percentage Share), 2012
Figure 9: Chinese HNWIs – Age Distribution, 2012
Figure 10: Chinese HNWIs – Job Titles, 2008–2012
Figure 11: Chinese HNWIs – Distribution by Industry, 2012
Figure 12: Chinese HNWIs – City Performance, 2008–2012
Figure 13: Chinese HNWIs – City Numbers, 2008 and 2012
Figure 14: Chinese HNWIs – City Forecasts, 2012–2017
Figure 15: Chinese HNWIs – City Numbers, 2012 and 2017
Figure 16: Chinese UHNWIs – Wealth Share vs Volume Growth, 2008–2012
Figure 17: China UHNWIs – Volume by Wealth Band, 2008–2017
Figure 18: Chinese UHNWIs – Wealth by Wealth Band (US$ Billion), 2008–2017
Figure 19: China UHNWIs – Age Distribution (Percentage Share), 2012
Figure 20: China UHNWIs – Distribution by Industry, 2012
Figure 21: China Billionaires – Market Overview, 2008–2017
Figure 22: China Centimillionaires – Market Overview, 2008–2017
Figure 23: China Affluent Millionaires – Market Overview, 2008–2017
Figure 24: Chinese Mid-Tier Millionaires – Market Overview, 2008–2017
Figure 25: China Lower-Tier Millionaires – Market Overview, 2008–2017
Figure 26: Chinese HNWIs – Asset Class Composition, 2008–2017
Figure 27: Chinese HNWIs – Trends in Alternative Assets (in US$ Billion), 2008–2017
Figure 28: China Trends in “Art, Wine and Wheels”, 2008–2012
Figure 29: Chinese HNWIs – Foreign Investment Allocation and Growth (Percentage), 2012–2017
Figure 30: Chinese HNWIs – Global Distribution of Foreign Investments, 2008–2017
Figure 31: Chinese HNWIs – Liquidity Breakdown (%), 2008–2017
Figure 32: China UHNWIs – Asset Class Composition, 2008–2017
Figure 33: China: Wealth Management Industry – Maturity Level of Players 7
Figure 34: China: Behavioral Mapping of HNWIs, 2012
Figure 35: Chinese Wealth Management Industry – Five Forces Analysis
Figure 36: SGD to US$ Exchange Rate, 2008–2017
Figure 37: China Real GDP Growth (%), 2008–2017
Figure 34: China GDP Per Capita, 2008–2017
Figure 35: China Domestic Market Capitalization (US$ Billions) 2008–2012
Figure 36: China Commodity Indices, 2008–2017
Figure 37: China Foreign Direct Investments (US$ Billions) 2008–2017
Figure 38: China Inflation Rate, 2008–2017
Figure 39: China: Money Market Rate, 2008-2017
Figure 40: China Balance of Payments (US$ Billions) 2008–2012
Figure 41: China Government Debt to GDP, 2008–2017
Figure 42: China Stock Market Performance, 2008–2017
Figure 43: China HNWI Wealth vs GDP Ratio, 2008–2017
Figure 44: Chinese HNWIs – Volume by Wealth Band, 2008–2017
Figure 45: Chinese HNWIs – Wealth by Wealth Band (in US$ Billions), 2008–2017
Figure 46: Chinese HNWIs – Wealth Per Capita (in US$ Billions), 2008–2017

COMPANIES MENTIONED

Bank of China
Agricultural Bank of China
China Construction Bank
Industrial & Commercial Bank of China
China Citic Bank
China Merchants Bank
Bank of Communications
China Minsheng Banking Corp
China Everbright Bank
Bank of Dalian
Standard Chartered Private Bank
AMC Group Asset management China
The Bank of East Asia (China) Ltd
Serficom Investment consulting Co. Ltd
Bank of Jiangsu

At the end of 2012, there were just over 1.4 million HNWIs in China, holding a combined worth of US$5.2 trillion in wealth, equivalent to 27% of the country’s total individual wealth. Between 2008 and 2012, Chinese HNWIs overperformed compared to the global average. As is evident, the number of HNWIs in China increased by around 89.9% within this period, from 779,896 HNWIs in 2008 to 1,481,363 HNWIs in 2012. Local HNWI wealth also increased from US$2.5 trillion to US$5.2 trillion during the same period, an increase of 171%. Growth in HNWI wealth and volume is expected to improve over the next five years. The total number of Chinese HNWIs is forecast to grow by 34%, to reach 2.2 million in 2017. HNWI wealth will record a percentage increase, of 50% to reach US$9.4 trillion by 2017.

China HNWI Performance, 2008-2017
China HNWI Performance, 2008-2017 

In 2012, real estate was the largest asset class for Chinese HNWIs (29.7% of total HNWI assets), followed by equities (26.3%), business interests (22%), cash and deposits (14.4%), alternatives (3.9%) and fixed income (3.9%). Equities recorded the strongest growth between 2008 and 2012, despite the trend for movement into safer assets during the financial crisis. Alternative assets held by Chinese HNWIs decreased in the same period, from 3.9% of total HNWI assets in 2008 to 3.7% in 2012. This was due to the weak performance of hedge funds and private equity holdings. The share of equities is expected to grow over the next five years, followed by real estate. Fixed income will be the worst-performing asset class. Consequently, there will be a movement away from fixed income and towards real estate and equities. As of 2012, HNWI liquid assets amounted to US$1.1 trillion, representing 22.1% of the wealth holdings of Chinese HNWIs.

In 2012, Chinese HNWIs held 12.6% (US$658 billion) of their wealth outside their home country, which is slightly lower than the global average of 20-30%. It is expected that foreign asset holdings will reach US$1068 billion by 2017, when they will account for 12% of total HNWI assets. In 2012, Asia-Pacific held 64.9% of the foreign assets of Chinese HNWIs. This was followed by North America with 14.4%, Europe with 10.4%, South America with 5.5%, and Africa and the Middle East with 2.2% and 2.6% respectively. Following the eurozone debt crisis and the movement of funds into potential Asia-Pacific economies, the share of foreign assets that Chinese HNWIs allocated to Europe fell from 12.9% in 2008 to 10.4% in 2012.

Beijing was the largest city for Chinese HNWIs, accounting for 14.2% of total HNWIs, equivalent to just over 213,000 in 2012. There are also sizable HNWI populations in Shanghai (166,000 HNWIs), Shenzhen (112,000 HNWIs), Hangzhou (99,800 HNWIs), Chengdu (55,600 HNWIs) and Nanjing (43,200 HNWIs). Beijing, Shanghai and Shenzhen were the top-performing cities in terms of HNWI volume between 2008 an 2012. In Beijing, the number of HNWIs rose from 96,818 in 2008 to 213,000 in 2012. In Shanghai, the volume increased from 78,302 in 2008 to 166,000 in 2012, and in Shenzhen, it rose from 57,330 in 2008 to 112,366 in 2012. HNWI volumes in Shanghai increased by 112% in the same period. 

The material was prepared in November, 2013.

LIST OF TABLES

Table 1: HNWI Wealth Band and Group Definitions
Table 2: Main Regions in China
Table 3: Chinese HNWIs – Volume Distribution Wealth Pyramid, 2012
Table 4: Chinese HNWIs – Wealth Distribution Wealth Pyramid (Percentage share), 2012
Table 5: China HNWI Sector Performance, 2008–2012
Table 6: Chinese HNWIs – Cities, 2012
Table 7: Chinese HNWIs – Top Cities, 2008–2012
Table 8: Chinese HNWIs − Population Density in Major Cities, 2012
Table 9: Chinese HNWI – Top Cities, 2008–2017
Table 10: Chinese HNWI Growth Rates for Top Cities, 2008–2017
Table 11: China UHNWI –Source of Wealth (Percentage), 2012
Table 12: Chinese UHNWIs in Top Cities, 2008–2017
Table 13: Chinese UHNWI Growth Rates for Top Cities, 2008–2017
Table 14: China Billionaires – Market Overview (US$ Billions) 2008–2017
Table 15: China Top-10 Billionaires (US$ Billions), 2012
Table 16: China Billionaire Wealth Growth, 2008−2012
Table 17: China Centimillionaires – Market Overview, 2008–2017
Table 18: China Affluent Millionaires – Market Overview, 2008–2017
Table 19: Chinese Mid-Tier Millionaires – Market Overview, 2008–2017
Table 20: China Lower-Tier Millionaires – Market Overview, 2008–2017
Table 21: Chinese Allocations of HNWI Assets, 2008−2017
Table 22: Chinese HNWIs − Holdings Growth (%), 2008–2017
Table 23: Chinese HNWIs – Trends of Investments in Alternative Assets (%), 2008–2017
Table 24: Chinese HNWIs – Alternative Asset Composition (%), 2008–2017
Table 25: China Trends in “Art, Wine and Wheels”, 2008–2012
Table 26: Global Prime Real Estate Prices Per Square Meters, US$ Terms, 2012
Table 27: Global: Prime International Cities Performance (%), 2008–2012
Table 28: Chinese HNWIs – (Percentage) Foreign Allocation, 2008–2017
Table 29: Chinese HNWIs – Liquidity Breakdown (US$ Billion), 2008–2017
Table 30: Chinese HNWIs – Liquidity Breakdown (%), 2008–2017
Table 31: China UHNWIs – Allocations and Share of HNWI Assets, 2012
Table 32: Major Companies - China Wealth Management and Private Banking Industry, 2012
Table 33: Chinese Income Tax Structure and Taxable Bands, 2012
Table 34: CNY to US$ Exchange Rate, 2008–2017
Table 35: China Real GDP Growth, 2008–2017
Table 36: China GDP Per Capita, 2008–2017
Table 37: China Domestic Market Capitalization (US$ Billions) 2008–2012
Table 38: China Commodity Indices, 2008–2017
Table 39: China Foreign Direct Investments (US$ Billions) 2008–2017
Table 40: China Inflation Rate, 2008–2017
Table 41: China Money Market Rate, 2008–2017
Table 42: China Balance of Payments (US$ Billions) 2008–2012
Table 43: China Government Debt to GDP, 2008–2017
Table 44: China Stock Market Performance, 2008–2012
Table 45: China HNWI Wealth vs GDP Ratio, 2008–2017
Table 46: China Appendix One
Table 47: China Appendix Two

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