With the rise in Chinese consumer spending expected to help to fuel the growth of the global luxury industry, it’s backed by the rapid spread of wealth in China. A new report released Tuesday by Bain Consulting and China Merchants Bank shows that while first-tier Chinese cities and coastal areas contain the largest number of HNWIs, now 22 Chinese provinces contained at least 20,000 consumers with US$1.47 million in investable assets.
However, the 2017 China Private Wealth Report shows that the growth rate of China’s private wealth market is slowing from a 21 percent annual rise between 2014 and 2016, to an expected 14 percent growth this year to RMB 188 trillion.
This cooling is not only due to the slowdown of China’s economy, but is also a result of China’s increasingly strict capital controls on overseas investments, such as property and insurance policies, according to Reuters. Both Hong Kong and the United States fell in popularity as targets for overseas investment for survey respondents, seeing an 18 percent drop and a 3 percent drop respectively in the last two years.
Hong Kong and the United States were still among the top five destinations for overseas investment, along with Australia, Canada, and Singapore. More than half of China’s HNWIs have investments abroad, and respondents in the survey said “wealth preservation” was among their top priorities, as opposed to more than eight years ago when respondents listed “quality of life” and “wealth creation” as their main goals.
Overall, China’s HNWIs grew nine times in the past 10 years to total 1.6 million in 2016, according to the report. Of this group, about 120,000 consumers had investable assets that totaled US$14.7 million, which was about 12 times the total in 2006.