Multimillionaires in China reaches 700,000

In May 7, China Merchants Bank and the consulting firm Bain jointly released “2013 China Private Wealth Report” indicating that at the end of 2012, the number of multimillionaires with over more than 10 million yuan (US $1.6 million) investment assets was more than 700,000 people in 2012, an increase of 200,000 compared 2010. The total investment assets held by these multimillionaires reached 22 trillion yuan (US $3.52 trillion) while the total personal investment assets in China was 80 trillion yuan (US $12.8 trillion), meaning to say that the millionaires gathered nearly thirty percent of total investment assets.

Faster growth of multimillionaires from central and west China

The report predicts that by 2013, the millionaires number will reach 840,000 with investable assets valued 27 trillion yuan (US$ 4.32 trillion).

The report was made based on more than 3,300 valid questionnaires and more than 100 interviews, the research objects diapered around 28 provinces (autonomous regions and municipalities) of mainland of China, the respondents included private banking customers, and other high net worth individuals, managers and industry experts. Investment assets covered personal financial assets and investment property, and excluded owner-occupied real estate, non-private investment equity of non-listed companies and consumer durables assets.

The report pointed out that at the end of 2012, there were 20 provinces in which the number of multimillionaires exceeded 10,000. In comparison to 2010, there were five new areas: Chongqing, Heilongjiang, Shanxi, Shaanxi and Inner Mongolia. The base of high net worth individuals in eastern coastal areas was larger, but due to the impact of the slowdown in export growth for SMEs, the growth rate leveled off. Central and western regions benefiting from national policy obtained rapid development of regional economy, the rapid growth of high net worth population was witnessed in Sichuan, Hunan and Hubei provinces with growth rate being more than 20% leading all areas.

25% of entrepreneurs want their children to take over the business

As China’s first generation of entrepreneurs are about to retire, the issue of family business successor has also become the focus in past two years.

In respect of the family business succession, the report showed that only about 25% of business owners clearly expressed the hope that the children can take over the family business, while close to 35% of the second-generation expressed that “I hope to take over the family business”. About 60% -70% of the respondents to “first generation of wealth creation” and “second-generation wealth heir” preferred the introduction of professional managers and they will choose become shareholders to continue the operation of the family business, or exit and sell the business. The report reflected the innovation and progress achieved on the concept of family wealth among the high net worth business owners groups and the second-generation heirs.

Source: 新京报(Beijing News)

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