Wealth in China: Sizing the Market Opportunity; Sizing the wealth market in China and its growth potential.

Powered by

All the vital news, analysis, and commentary curated by our industry experts.

$3450

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.

Scope

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

EXECUTIVE SUMMARY

Wealth growth is slowing but will still outstrip the West

Key findings

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

APPENDIX

Abbreviations and acronyms

Supplementary data

Definitions

Affluent

Common Reporting Standard (CRS)

Domicile

Double taxation agreement (DTA)

Foreign Account Tax Compliance Act (FATCA)

HNW

Liquid assets

Mass affluent

Onshore

Residency

Tax information exchange agreement (TIEA)

Methodology

Global Wealth Model methodology

Global Retail Investments Analytics methodology

Verdict Financial's 2015 Global Wealth Managers Survey

Bibliography

Further reading

About Verdict Financial

Disclaimer

Table

Table 1: Progressive tax rates levied in Chi, 2015

Table 2: Chi: adult population segmented by affluent category and asset band (000s), 2010?14

Table 3: Chi: adult population segmented by affluent category and asset band (000s), 2015e?19f

Table 4: Chi: total liquid wealth segmented by affluent category and asset band ($bn), 2010-14

Table 5: Chi: total liquid wealth segmented by affluent category and asset band ($bn), 2015e-19f

Table 6: Chinese yuan-US dollar exchange rate, December 31, 2014 and December 31, 2015

Figures

Figure 1: Affluent individuals represented 3.52% of the population in 2015

Figure 2: The affluent population holds 84.1% of retail liquid assets in Chi

Figure 3: While lower than in the past, retail savings and investment growth is forecast to remain strong

Figure 4: Deposits account for 81.1% of the Chinese retail and investment market

Figure 5: Mutual funds and bonds are forecast to grow at impressive rates

Figure 6: Deposit growth is inextricably linked to real GDP growth, but importantly always outperforms it

Figure 7: Retail bond holdings are negatively correlated to the Shanghai Composite Index

Figure 8: Stock market performance has been weak over the past year

Figure 9: There is a strong correlation between stock market performance and equity funds, and to a lesser extent mutual fund holdings

Figure 10: Chi's total fund industry is domited by money market funds

Figure 11: A significant proportion of HNW wealth is allocated to non-traditiol investments

Figure 12: Chinese HNW individuals hold 27% of their assets offshore

Figure 13: Asset diversification and investment options remain the biggest motivations for offshore investment

Figure 14: The largest proportion of Chinese HNW offshore wealth is booked in the US

Figure 15: The Chinese government has signed several TIEAs over the past few years

Frequently asked questions

Wealth in China: Sizing the Market Opportunity; Sizing the wealth market in China and its growth potential. standard reports
Currency USD
$3,450

Can be used by individual purchaser only

$10,350

Can be shared globally by unlimited users within the purchasing corporation e.g. all employees of a single company


Undecided about purchasing this report?

Enquire Before Buying

Get in touch to find out about multi-purchase discounts

reportstore@globaldata.com
Tel +44 20 7947 2745

Every customer’s requirement is unique. With over 220,000 construction projects tracked, we can create a tailored dataset for you based on the types of projects you are looking for. Please get in touch with your specific requirements and we can send you a quote.

See what our customers are saying

“The GlobalData platform is our go-to tool for intelligence services. GlobalData provides an easy way to access comprehensive intelligence data around multiple sectors, which essentially makes it a one-for-all intelligence platform, for tendering and approaching customers.

GlobalData is very customer orientated, with a high degree of personalised services, which benefits everyday use. The highly detailed project intelligence and forecast reports can be utilised across multiple departments and workflow scopes, from operational to strategic level, and often support strategic decisions. GlobalData Analytics and visualisation solutions has contributed positively when preparing management presentations and strategic papers.”

Business Intelligence & Marketing Manager, SAL Heavy Lift

“COVID-19 has caused significant interference to our business and the COVID-19 intelligence from GlobalData has helped us reach better decisions around strategy. These two highlights have helped enormously to understand the projections into the future concerning our business units, we also utilise the project database to source new projects for Liebherr-Werk to use as an additional source to pitch for new business.”

Market Analyst & Management, Liebherr-Werk

Your daily news has saved me a lot of time and keeps me up-to-date with what is happening in the market, I like that you almost always have a link to the source origin. We also use your market data in our Strategic Business Process to support our business decisions. By having everything in one place on the Intelligence Center it has saved me a lot of time versus looking on different sources, the alert function also helps with this.

Head of Key Accounts, Saab AB

Having used several other market research companies, I find that GlobalData manages to provide that ‘difficult-to-get’ market data that others can’t, as well as very diverse and complete consumer surveys.

Marketing Intelligence Manager, Portugal Foods

Our experience with GlobalData has been very good, from the platform itself to the people. I find that the analysts and the account team have a high level of customer focus and responsiveness and therefore I can always rely on. The platform is more holistic than other providers. It is convenient and almost like a one stop shop. The pricing suite is highly competitive and value for our organisation.

I like reports that inform new segments such as the analysis on generation Z, millennials, the impact of COVID 19 to our banking customers and their new channel habits. Secondly the specialist insight on affluent sector significantly increases our understanding about this group of customers. The combination of those give us depth and breadth of the evolving market.

I’m in the business of answering and helping people make decisions so with the intelligence center I can do that, effectively and efficiently. I can share quickly key insights that answer and satisfy our country stakeholders by giving them many quality studies and primary research about competitive landscape beyond the outlook of our bank. It helps me be seen as an advisory partner and that makes a big difference. A big benefit of our subscription is that no one holds the whole data and because it allows so many people, so many different parts of our organisation have access, it enables all teams to have the same level of knowledge and decision support.

Head of Customer Insight and Research, Standard Chartered

“I know that I can always rely on Globaldata’s work when I’m searching for the right consumer and market insights. I use Globaldata insights to understand the changing market & consumer landscape and help create better taste & wellbeing solutions for our customers in food, beverage and healthcare industries.

Globaldata has the right data and the reports are of very high quality compared to your competitors. Globaldata not only has overall market sizes & consumer insights on food & beverages but also provides insights at the ingredient & flavour level. That is key for B2B companies like Givaudan. This way we understand our customers’ business and also gain insight to our unique industry”

Head of Consumer Sensory Insights, Givaudan

GlobalData provides a great range of information and reports on various sectors that is highly relevant, timely, easy to access and utilise.  The reports and data dashboards help engagement with clients; they provide valuable industry and market insights that can enrich client conversations and can help in the shaping of value propositions. Moreover, using GlobalData products has helped increase my knowledge of the finance sector, the players within it, and the general threats and opportunities.

I find the consumer surveys that are carried out to be extremely beneficial and not something I have seen anywhere else. They provided an insightful view of why and which consumers take (or don’t) particular financial products. This can help shape conversations with clients to ensure they make the right strategic decisions for their business.

One of the challenges I have found is that data in the payments space is often piecemeal. With GD all of the data I need is in one place, but it also comes with additional market reports that provide useful extra context and information. Having the ability to set-up alerts on relevant movements in the industry, be it competitors or customers, and have them emailed directly to me, ensures I get early sight of industry activity and don’t have to search for news.

Senior Account Manager, TSYS
Financial Services
New
Worldline - Competitor Profile
$350 | March 2024
Financial Services
New
M-PESA - Competitor Profile
$350 | April 2024
Go even deeper with GlobalData Intelligence Center

Every Company Report we produce is powered by the GlobalData Intelligence Center.

Subscribing to our intelligence platform means you can monitor developments at Wealth in China: Sizing the Market Opportunity; Sizing the wealth market in China and its growth potential. in real time.

  • Access a live Wealth in China: Sizing the Market Opportunity; Sizing the wealth market in China and its growth potential. dashboard for 12 months, with up-to-the-minute insights.
  • Fuel your decision making with real-time deal coverage and media activity.
  • Turn insights on financials, deals, products and pipelines into powerful agents of commercial advantage.