The high-net-worth individual is a much sought-after creature in China. The expectation that these individuals will grow in worth and total number is the major reason luxury brands set up shop here.
These brands may therefore draw much encouragement from the findings of this year’s Asia-Pacific Wealth Report, released on Thursday by Capgemini and Merrill Lynch. There were 415 high-net-worth individuals (classified as people with more than US$1 million in investible assets) in China at the end of 2007, up from 345 the previous year, the report said. This year-on-year growth rate of 20.3% is topped only by Vietnam and India.
There were 2.8 million high-net-worth individuals in Asia-Pacific as a whole, and they control assets worth a total of US$9.5 trillion. China accounts for 22.3% of this figure, which puts it in second place after Japan (40.1%).
Despite the turmoil in the financial markets and its possible knock-on effect on economic growth, Capgemini and Merrill Lynch said they were sticking by their earlier projection – made in June – that the region’s high net worth individuals will have assets of US$13.9 trillion by 2012, an annual growth rate of 7.9%.
The report also noted signs of a split in the nature of services offered to the wealthy. Emerging high net worth individuals, who often have limited investment experience, are being targeted with standardized priority banking services, while custom-made private banking services are aimed at the ultra-high-net-worth individuals (those with at least US$30 million in investible assets).
This particular finding fits in well with the analysis of mainland China’s wealth management services that appeared in the September issue of China Economic Review.