Slowdown in growth of nation's wealthiest
By Lu Nengneng |
December 21, 2012, Friday
|
Print Edition
Print Edition
THE scale of China's private wealth and the number of its rich people grew at a slower pace this year amid the nation's economic downturn, especially in traditionally affluent areas, according to a survey released yesterday.
The 2012 China Wealth Market Survey of nearly 2,000 millionaires, in terms of US dollar, across China found that the total value of private investable assets in the country is estimated to reach 73 trillion yuan (US$11.7 trillion) this year with a 14 percent annual increase. The average growth rate from 2009 to 2011 was 24 percent.
Meanwhile, the number of China's high-net-worth households with investable assets worth more than 6 million yuan rose 17 percent to 1.74 million, a dramatic slowdown from the average 38 percent increase over the past three years.
With a high density of high-net-worth households already, rich provinces and cities along the eastern coasts, such as Shanghai and Guangzhou, are underperforming the national average growth "due to a contraction of business owners' wealth as a result of the economic downside," the survey by Boston Consulting Group and China Construction Bank Corp said.
In contrast, underdeveloped inland provinces, such as Anhui and Hunan, report a 30 percent increase in wealthy families.
The "economic growth engine in China will shift to central-western inland regions," the report said. "Provinces with large populations and sizable private wealth will represent significant growth potential, such as Anhui, Hunan, Hubei, Sichuan, Shandong and Shaanxi."
Household savings in wealthy families have slowed, accounting for only 51 percent of their investable asset portfolio this year, which is the lowest proportion so far and a 4 percent decrease from last year. Instead, the wealth is flowing to high-yielding finance programs. The amount of money held in wealth management products by banks has almost doubled each year to make up a fifth of the investable asset pool. Wealthy Chinese are steadily moving their money abroad, the report said.
A quarter of respondents yet to establish overseas businesses said they "would definitely or probably use offshore financial services in the upcoming three years."
The 2012 China Wealth Market Survey of nearly 2,000 millionaires, in terms of US dollar, across China found that the total value of private investable assets in the country is estimated to reach 73 trillion yuan (US$11.7 trillion) this year with a 14 percent annual increase. The average growth rate from 2009 to 2011 was 24 percent.
Meanwhile, the number of China's high-net-worth households with investable assets worth more than 6 million yuan rose 17 percent to 1.74 million, a dramatic slowdown from the average 38 percent increase over the past three years.
With a high density of high-net-worth households already, rich provinces and cities along the eastern coasts, such as Shanghai and Guangzhou, are underperforming the national average growth "due to a contraction of business owners' wealth as a result of the economic downside," the survey by Boston Consulting Group and China Construction Bank Corp said.
In contrast, underdeveloped inland provinces, such as Anhui and Hunan, report a 30 percent increase in wealthy families.
The "economic growth engine in China will shift to central-western inland regions," the report said. "Provinces with large populations and sizable private wealth will represent significant growth potential, such as Anhui, Hunan, Hubei, Sichuan, Shandong and Shaanxi."
Household savings in wealthy families have slowed, accounting for only 51 percent of their investable asset portfolio this year, which is the lowest proportion so far and a 4 percent decrease from last year. Instead, the wealth is flowing to high-yielding finance programs. The amount of money held in wealth management products by banks has almost doubled each year to make up a fifth of the investable asset pool. Wealthy Chinese are steadily moving their money abroad, the report said.
A quarter of respondents yet to establish overseas businesses said they "would definitely or probably use offshore financial services in the upcoming three years."
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