China’s super rich to grow by 16 per cent: Report

Friday, 31 December 2010 00:21 - - {{hitsCtrl.values.hits}}

BEIJING: The number of super rich on the Chinese mainland currently holding investable assets to the tune of USD 2.85 billion is expected to rise by 16 per cent this year, a report has said.

The Chinese mainland is estimated to have 383,000 individuals of high net worth this year, compared to 331,000 in 2009, according to the China Private Wealth Report 2010 released yesterday by Forbes China in association with China Construction Bank .

The total investment assets owned by those millionaires will rise to 10 billion yuan (USD 1.5 billion) by the year end - a 16 per cent increase compared to 8.6 billion yuan (USD 1.2 billion) last year.

The report defines high net worth individuals as those with at least 10 million yuan (USD 1.5 million) in investable assets, which excludes primary residences and assets of poor liquidity. The number of such people on the Chinese mainland dropped to 249,000 in 2008 from 287,000 in 2007 as a result of the global financial crisis.

However, ample liquidity - the result of the government’s four trillion yuan stimulus package and fast rising money supply - triggered a rally in stock and house prices, Shanghai Daily reported.

Though China is now tightening its monetary policy, the easing in Western nations may still see money and credit flooding to China’s markets in the next quarter.

But China’s super rich are facing a problem in maintaining the value of their assets, the report said, adding that inflationary pressure and uncertainties in the property market and global economy will make wealth management more difficult in 2011.

The investable assets held by the super rich totalled 18.3 trillion yuan (USD 2.85 billion), or 21.4 per cent of the nation’s total, in 2009 and may reach 22.4 trillion yuan, or 22.4 per cent of total, this year, it said.

The bulk of the mainland’s super rich were born in the 1960s and 1970s, with 11.8 per cent born in the 1980s, the report said.

Most of the super rich are in manufacturing and trade businesses, reflecting China’s role as the world’s factory.

Some 12.3 per cent are in the financial business and 11.6 per cent in real estate, the report said.

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