Wealth Management in China 2007

Published by: Datamonitor

Published: Oct. 10, 2007 - 41 Pages

Table of Contents

Overview

Catalyst

Summary

Executive Summary

China's economy is booming, which has resulted in onshore savings and investments balances increasing strongly

China's wealthy population represents a very attractive market for onshore wealth managers

Table of Contents

Table of figures

Table of tables

Chapter 2 Market overview

China's economy has been booming

Historic GDP growth levels have been spectacular

However, the market still has room for growth

As a result, China's onshore liquid asset market has boomed

Chinese deposit balances have been growing

Direct equity balances declined in 2004 and 2005, however recovered strongly in 2006

Despite a slowdown in 2003, mutual fund balances have grown strongly

Retail bond balances dropped sharply in 2003, however the market recovered significantly

Trends in Chinese products and services

In 2006, Chinese equities rose sharply

Chinese government looks to slow the property market

Regulatory changes are making it easier for foreign banks

China has relaxed the rules on foreign banks

Local incorporation has begun

Despite a slowdown in 2004, the Chinese affluent population and onshore liquid assets has grown strongly

There were 8.6 million wealthy individuals in China in 2006

Wealthy individuals in China held USD3.2 trillion in onshore liquid assets in 2006

2008-9 will be characterized by struggling economies worldwide

Rising interest rates, excessive borrowing and negative savings rates have combined in a perfect storm that will upend most of the world's economies

The widespread securitization of loans will compound this problem

And the US economy is not healthy enough to 'expand' itself out of this market

Foreign direct investment may also boost the economy, however foreign investors are pulling money out of the US markets

A continued Treasury sell-off may further depress the dollar and force interest rate hikes ...

Another major terrorist attack in the US would destabilize the economy further

Market capitalization will fall worldwide as US stock markets continue their jitters

China's wealthy population represents a very attractive market for onshore wealth managers

There will be almost 16 million wealthy individuals living in China by 2011

Wealthy individuals in China will hold over USD6 trillion in onshore liquid assets by 2011

Data

Chapter 3 Competitive Dynamics

Introduction

Competitive interest is intensifying

There have been many entries into China's wealth management space by foreign players in the last 18 months.

But the local banking and investment companies are well-established

The big four banks of China hold 51% of total assets

Bank of China

Industrial and Commercial Bank of China

China Construction Bank

Agricultural Bank of China

Securities companies have limited services available to clients

Financial planning industry is developing in China

Wealth Management operations

Bank of China (BOC)

Industrial and Construction Bank of China (ICBC)

Other State-Owned Banks Bank of China

Joint stock banks

Citigroup Private Bank

HSBC

UBS Wealth Management

APPENDIX

Definitions

CAGR

HNW

Liquid assets

Retail

Mass affluent

Mass market

Methodology

Global wealth Model

The UK sub model

Global sub model (for all other countries)

Forecasting methodology

Continuous refinement to the understanding of liquid wealth distribution

Datamonitor's wealth numbers compared with other wealth numbers

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Chinese annual GDP growth, 1996-2006

Table 2: Industry sector splits as percentage of GDP for China, 1996-2005

Table 3: Industry sector splits as percentage of GDP for selected countries, 2005

Table 4: Chinese onshore retail savings and investments balances in USDm, 2002-06

Table 5: Stock market capitalizations in China, 2002-06

Table 6: Number of wealthy individuals segmented by liquid asset band, 2002-6

Table 7: Aggregate onshore liquid assets segmented held by wealthy individuals, by liquid asset band, 2002-6

Table 8: Number of wealthy individuals segmented by liquid asset band, 2007-11

Table 9: Aggregate onshore liquid assets segmented held by wealthy individuals, by liquid asset band, 2007-11

List of Figures

Figure 1: Chinese GDP has grown by 10.3% compounded annually between 2002-06

Figure 2: China's services sector has evolved over the past 10 years

Figure 3: China's services sector is comparatively underdeveloped, 2005

Figure 4: Chinese onshore retail savings and investments balances in USDbn, 2002-06

Figure 5: Chinese stock exchange market capitalizations in CNYm, 2002-06

Figure 6: Wealthy individuals declined slightly in 2004 but recovered by 2006

Figure 7: Onshore liquid assets of wealthy individuals in China has grown strongly

Figure 8: The number of wealthy individuals in China is expected to grow 9.0% compound annually from 2007 to 2011.

Figure 9: Aggregate onshore liquid assets of wealthy Chinese will grow 9.5% compound annually from 2007-2011

Figure 10: The four state-owned banks control over half the total banking assets in China

Abstract

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