Wealth gap wider as richest families get even richer
By Lu Nengneng |
December 23, 2011, Friday
|
Print Edition
Print Edition
CHINA'S wealthy community is expected to show a marked increase this year, widening the gap between the rich and the poor, according to the latest financial study.
The total amount of personal investable assets in the country will rise 14.8 percent to 62 trillion yuan (US$ 9.8 trillion) by the end of the year from 2010's 54 trillion yuan. And the number of families with investable assets of more than 6 million yuan will grow from last year's 1.01 million to 1.21 million, the Boston Consulting Group and China Construction Bank predicted in a joint study yesterday.
The investable assets owned by wealthy families should reach 27 trillion yuan in 2011, compared with 23 trillion yuan in 2010, the study said.
Around 70 percent of such families are concentrated in 10 provinces in China. Up to 35 percent of them live in Shanghai, Beijing and Guangdong Province.
The study was based on surveys among more than 2,100 high-net-worth individuals.
Savings, though still the biggest category, dropped from 61 percent of their asset portfolios in 2008 to 55 percent in 2010 while financial products issued by commercial banks advanced to second spot with relatively high yields and tolerable risks as wealth safety still comes before life quality for China's rich, the study said.
Up to 57 percent and 53 percent of survey participants expressed interest in fixed-income and trust assets respectively. The scale of latter has grown 65 percent annually in China over the past three years, it said.
The wealth overseen by China's asset managers surged 33.7 percent to US$ 8.2 trillion in 2010, compared with the world's average growth of 9.2 percent, and is expected to outperform globally to expand at a compound annual rate of 14 percent till 2015.
Families in China with investable assets of more than 50 million yuan are outpacing the less wealthy majority of high-net-worth families.
Up to 88 percent of study participants acknowledged the fact that the divide between the rich and the poor in China was widening.
The richest 10 percent of the urban population earned 8.9 times that of the poorest 10 percent in 2009 compared with 2.9 times in 1985, while the average income of urban residents was 3.3 times that of their rural counterparts in 2009, according to a report published by Science Press.
Though the Gini coefficient, a key gauge of income inequality, has long passed the warning mark of 0.4 in China and climbed up to 0.48 in 2010, the wealth disparity continues to deteriorate as the rich are only getting richer more quickly.
A Gini coefficient value of 0 is perfect equality and 1 is where only one person has all the income
The wealthiest 10 percent of the urban population enjoyed a 37-fold rise in earnings from 1985 to 2009 while the middle 20 percent and the poorest 10 percent saw their incomes rise 21-fold and 12-fold, respectively.
Yang Zaiping, vice president of the China Banking Association, said that asset managers should help to channel wealth to support substantial economic activities as a way to direct China's richest people to take on more social responsibilities.
The total amount of personal investable assets in the country will rise 14.8 percent to 62 trillion yuan (US$ 9.8 trillion) by the end of the year from 2010's 54 trillion yuan. And the number of families with investable assets of more than 6 million yuan will grow from last year's 1.01 million to 1.21 million, the Boston Consulting Group and China Construction Bank predicted in a joint study yesterday.
The investable assets owned by wealthy families should reach 27 trillion yuan in 2011, compared with 23 trillion yuan in 2010, the study said.
Around 70 percent of such families are concentrated in 10 provinces in China. Up to 35 percent of them live in Shanghai, Beijing and Guangdong Province.
The study was based on surveys among more than 2,100 high-net-worth individuals.
Savings, though still the biggest category, dropped from 61 percent of their asset portfolios in 2008 to 55 percent in 2010 while financial products issued by commercial banks advanced to second spot with relatively high yields and tolerable risks as wealth safety still comes before life quality for China's rich, the study said.
Up to 57 percent and 53 percent of survey participants expressed interest in fixed-income and trust assets respectively. The scale of latter has grown 65 percent annually in China over the past three years, it said.
The wealth overseen by China's asset managers surged 33.7 percent to US$ 8.2 trillion in 2010, compared with the world's average growth of 9.2 percent, and is expected to outperform globally to expand at a compound annual rate of 14 percent till 2015.
Families in China with investable assets of more than 50 million yuan are outpacing the less wealthy majority of high-net-worth families.
Up to 88 percent of study participants acknowledged the fact that the divide between the rich and the poor in China was widening.
The richest 10 percent of the urban population earned 8.9 times that of the poorest 10 percent in 2009 compared with 2.9 times in 1985, while the average income of urban residents was 3.3 times that of their rural counterparts in 2009, according to a report published by Science Press.
Though the Gini coefficient, a key gauge of income inequality, has long passed the warning mark of 0.4 in China and climbed up to 0.48 in 2010, the wealth disparity continues to deteriorate as the rich are only getting richer more quickly.
A Gini coefficient value of 0 is perfect equality and 1 is where only one person has all the income
The wealthiest 10 percent of the urban population enjoyed a 37-fold rise in earnings from 1985 to 2009 while the middle 20 percent and the poorest 10 percent saw their incomes rise 21-fold and 12-fold, respectively.
Yang Zaiping, vice president of the China Banking Association, said that asset managers should help to channel wealth to support substantial economic activities as a way to direct China's richest people to take on more social responsibilities.
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