Wealth in China: Sizing the Market Opportunity; Sizing the wealth market in China and its growth potential.
All the vital news, analysis, and commentary curated by our industry experts.
At the end of 2015, of the approximately 1.05 billion adults living in China 3.5% could be considered affluent. Asset growth is expected to be strongest in the $10m+ asset band, which will record a CAGR of 14.1% between 2015 and 2019, compared to a CAGR of 8.8% for mass affluent individuals. Deposits continue to dominate China’s retail investments market, but mutual fund holdings are forecast to grow at the fastest pace over the next five years. Chinese high net worth (HNW) investors allocate a noteworthy proportion of their investable assets into non-traditional investments, mostly in direct property. However, this is expected to change thanks to the recent drop in property prices.
Wealth in China: Sizing the Market Opportunity analyzes China's wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.
Specifically, the report:
• Sizes the affluent market (both by the number of individuals and the value of their liquid assets) using Verdict Financial’s proprietary datasets.
• Analyzes which asset classes are favored by Chinese investors and how their preferences impact the growth of the total savings and investments market.
• Examines HNW clients’ attitudes towards non-liquid investments, such as property and commodities.
• Identifies key drivers and booking centers for offshore investments.
Reasons to Buy
Benchmark your share of the Chinese wealth market against the current market size.
Forecast your future growth prospects using our projections for the market to 2019.
Identify your most promising client segment by analyzing the penetration of affluent individuals in China – both at country and regional level.
Evaluate your HNW proposition by understanding how the local tax system affects your HNW clients.
Review your offshore strategy by learning the HNW motivations for offshore investments and their preferred booking centers.
Table of Contents
Wealth growth is slowing but will still outstrip the West
Critical success factors
SIZING AND FORECASTING THE CHINESE WEALTH MARKET
2.8% of China's affluent individuals can be considered HNW
Affluent individuals in China account for
3.5% of the total adult population
Affluent individuals account for
3.5% of the population but hold
84.1% of liquid assets in China
Chinese HNW individuals held $3,565bn in liquid assets in 2015
DRIVERS OF GROWTH IN THE CHINESE WEALTH MARKET
China's retail savings and investments have impressed with remarkable growth in recent years
China's retail investment market is forecast to perform strongly despite weaker economic conditions
As can be expected in emerging markets, deposits dominate China's retail investment market
Deposits continue to dominate China's retail investment market, but mutual fund holdings are forecast to grow fastest
Retail deposit growth is set to pick up again in 2016, but will be less pronounced than in the past
However, deposit rates remain low and face stiff competition from money market funds
Despite strong growth rates, China's retail bond market will remain insignificant
The subdued performance of the Shanghai Composite Index will limit growth of direct equities
Money market funds are growing in popularity, shielding funds from the vagaries of the stock market
HNW INVESTMENT PREFERENCES
Chinese HNW individuals allocate 35% of their portfolios outside traditional liquid assets
Chinese HNW investors allocate an above-average proportion of their wealth into property, but this is about to change
Alternatives and commodities have become an integral part of the typical HNW portfolio in China
A significant proportion of HNW wealth is invested offshore
Despite maintaining a closed capital account, a significant amount is leaving the country every year
Better returns overseas and local economic instability prompt Chinese individuals to invest offshore
Tax is a comparatively limited driver for offshore investments
The US is the single most important booking center for Chinese HNW wealth
Abbreviations and acronyms
Common Reporting Standard (CRS)
Double taxation agreement (DTA)
Foreign Account Tax Compliance Act (FATCA)
Tax information exchange agreement (TIEA)
Global Wealth Model methodology
Global Retail Investments Analytics methodology
Verdict Financial's 2015 Global Wealth Managers Survey
About Verdict Financial
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