MORE rich Chinese are expected to send their assets overseas for better investment returns as the economy continues to open up, according to a report.
It is estimated that the proportion of Chinese individual assets to be allocated overseas will increase from the current 4.8 percent to about 9.4 percent in the next five years, with the assets under management of overseas investment rising to 13 trillion yuan (US$2 trillion), according to the 2016 China Wealth Report jointly released by the Industrial Bank and The Boston Consulting Group.
The proportion of personal wealth allocated to foreign assets is lower in China than in other countries.
As the Chinese economy continues to open, however, the proportion will increase thanks to liberal regulations and growing interest in overseas investment.
The report revealed that, despite a slowing Chinese economic growth, the wealth of high-net-worth individuals with investable assets of more than 6 million yuan is rising steadily.
China’s high-net-worth families will reach 3.88 million by 2020 and their investable financial assets will then account for 51 percent of China’s individual wealth. The country’s continuous economic globalization will drive the HNWIs to shift from domestic wealth allocation to global wealth allocation.
The rise of China’s HNWIs offers great opportunities for the development of private banking businesses, the report said.
However, there is an undersupply of private banking services. China’s private banking institutions manage under 20 percent of the wealth of high net worth families, which implies huge opportunities for development, according to Chen Jinguang, vice president of the Industrial Bank.