1. The Chinese HNWI Market in 2012
Report Details:
Published:August 2012
No. of Pages: 94
Price: Single User License – US$3800
•The report provides market analysis, information and insights, including:
•Drawing on both primary and secondary sources, the report provides a bottom up description and
analysis of the mainland (HNWI) market
•It examines changes in the investment approach taken by Chinese HNWI since 2007-8
•Domestic institutions offering on-shore services are listed, and the regulatory environment is also
discussed
Executive summary
Despite the global financial uncertainty, the number of high net worth individuals (HNWIs) in China
has risen sharply by 41% in each the last four years. Although HNWIs make up only 0.4% of
China’s population, this is equivalent to over 4 million individuals. Furthermore, the number of
HNWIs in China is expected to double by 2015, which will change’s China’s position as the third-
largest global wealth market in 2011 to the second-largest global wealth market in 2015. By the
end of 2011, there was an estimated US$4.3 trillion of investable assets in China. It is estimated
that HNWI wealth will grow at a compound annual growth rate (CAGR) of 14.7% over the forecast
period (2011–2015), to reach US$7.5 trillion by 2015. This excludes important contributory factors
such as private business assets, real estate investments, art and other luxury investments or
offshore funds.
Scope
•This research report analyses the changing HNWI demographic in mainland China
•It assesses the impact the capital markets correction in 2008 had on client expectations
•It considers the private banking services that influence a client's choice in provider
•It details the best way to move forward and capitalise on this valuable market
Key highlights
•The number of HNWIs in China increased by 41% every year during 2007–2011, and the number
of HNWIs reached almost 1 million in 2011 while the number of UHNWIs reached 60,000.
•The volume of UNHWIs in finance is projected to grow by 25% per year over the forecast period,
due to the large growth in the private banking, bonds, hedge funds, private equity and insurance
industries, as well as the continued wealth diversification of China’s middle class.

2. •HNWI allocations to property are expected to fall to 23% of total assets in 2015, from 27% in
2011. However, the amount of wealth held in foreign real estate is forecast to increase.
Reasons to buy
•Establish the distinct demographics of Chinese HNWI's
•Read how Chinese on-shore HNWI's invest to generate excess returns in a less favourable
macro environment
•Assess the impact of the 2008 global de-rating on client expectations
•See what the constraints on the domestic wealth market are
•Find out how the offshore market can gain Chinese investors if the right performance and service
can be offered
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Major points covered in Table of Contents of this report include
Table Of Contents
Executive Summary
List of Figures
List of Tables
Chapter I: Key facts on HNWIs in China
1.1 Traditional regional distribution of HNWIs is changing as growth is increasing in inland cities
1.2 Lowering property prices will threaten HNWI growth in 2012
1.3 China is in the top three in terms of number of households with a net wealth of US$1 Million
1.4 Volumes of both HNWIs and investable assets will grow quickly in the next three years
Chapter 2: The geographical distribution of China's HNWIs
2.1 Beijing, Guangdong and Shanghai are the key 3 regions
2.2 Top three regions account for nearly half the total number of wealthy individuals
2.3 The traditionally less attractive east coast has had a bigger growth of HNWIs than the rest of
China
Chapter 3: Segmenting HNWI's
3.1 Business owners - 55% of the total HNWIs
3.2 Real estate investors
3.3 Stock market investors
3.4 Senior management
Chapter 4: Industries monopolise HNWI wealth creation
4.1 The entertainment and retail industries are lagging behind their peers worldwide

3. Chapter 5: Profiling Chinese HNWIs
5.1 A typical Chinese HNWI
5.2 The US losing its level of billionaires
5.3 Starting from scratch - first-generation wealth accounts for the majority of HNWIs
5.4 The majority of Chinese HNWIs are under 50 years old
5.5 Women represent a higher proportion of HNWIs in China than globally
5.6 The majority of Chinese HNWIs have post-graduate degrees
Chapter 6: HNWI investment behaviour
6.1 Opening up to the idea of professional wealth management services
6.2 Market volatility during 2007-2009
6.3 Most HNWIs are prepared to take medium risks
6.4 More Chinese HNWIs are thinking about inheritance issues
6.5 Current investment tendencies for Chinese HNWIs
Chapter 7: Investment aims of Chinese HNWIs
7.1 Ever-increasing expectations
7.2 Prioritising investment aims - the top three
7.3 The most generous donors
7.4 The majority of donations are event-specific
7.5 Chinese banks are getting involved in charity
7.6 Wealth preservation has an influence on domestic and foreign asset allocation
7.7 Chinese HNWIs pursue investment immigration
7.8 The complexity of managing overseas assets will require professional advice
7.9 Educating children is becoming more important
7.2.1 Dynamics of HNWIs asset allocation
7.2.2 The need for financing and value-added services
7.2.3 Word of mouth is the most important information channel for choosing a private banking
service
Chapter 8: The competitive landscape of Chinese private banking
8.1 An overview of the private banking industry
8.2 The five largest state-owned commercial banks are active in private banking
8.3 Local and foreign banks now offer private banking services throughout China
8.4 Chinese private banking networks
8.5 Ranking the domestic banks' private banking businesses
8.6 Leading private wealth managers among Chinese domestic banks
Chapter 9: Overseas banks in China
9.1 Overseas banks less prominent than they would like to be
9.2 How overseas banks are organised in China
9.3 Foreign reputations took a knock following the banking crisis

4. 9.4 Differences between domestic and foreign banks
Chapter 10: The advantages of a state-controlled banking system
10.1 Domestic private banks are the first choice of wealth management customers
10.2 Expectations of a new banking model to emerge
10.3 The future for private banking services
Chapter 11: The policy environment for QDIIs and QFIIs
11.1 Qualified Domestic Institutional Investors (QDII)
11.2 QDII Scope Widened in 2007
11.3 QDII Regulations are Rigid
11.4 QDII's scope expanded
11.5 Investing on the Hong Kong stock exchange
11.6 New private banking regulations
11.7 Qualified Foreign Institutional Investors (QFII)
11.8 Cross-border Co-operation
Chapter 12: Xintuo Chinese Trusts
12.1 Investment Trusts gaining in popularity
12.2 A uniquely Chinese proposition
12.3 Lightly regulated
12.4 History of the Chinese trust sector
12.5 Enacting the Trust Law
12.6 Recent updates from the trust sector
12.7 Structures and product composition
12.8 Real estate investment trust (REIT)
12.9 QDII quotas to trust companies
Chapter 13: Other types of trusts
13.1 Alternative investments
13.2 Private equity investment trusts
13.3 Securities ITs
13.4 Infrastructure ITs
13.5 Bank-trust co-operation Products
13.6 Trust companies
13.7 Strategic overseas investors
Chapter 14:
14.1 Noah Private Wealth Management
14.2 The ease of starting up a wealth management business
14.3 Unregulated lending?
14.4 Private lending - Total market size

5. 14.5 The problem with negative real interest rates
14.6 Informal borrowing channels
Chapter 15: The Chinese economy - boom and bust?
15.1 A slowing economy
15.2 An overheating real estate market
15.3 Real estate accounts for 40% of investible assets
15.4 An overheating real estate market
Chapter 16: High-end consumption
16.1 The art market
16.2 Fine wine
16.3 Luxury goods
16.4 Yachts and Planes
About the authors
List Of Tables
Table 1: The geographical distribution of China's HNWIs by region
Table 2: The sources of HNWI wealth in China and the world
Table 3: Competitive advantages of different financial institutions
Table 4: Number of branches and centres that are owned by banks providing private banking
services
Table 5: Quota and Approval Time of QDII
Table 6: Where will HNWIs invest their money? (by region)
Table 7: Shares of foreign investors in Chinese trust companies
Table 8: Regulations in real estate market
List Of Figures
Figure 1: HNWIs - Regional distribution, 2011
Figure 2: HNWIs - Sources of wealth, 2011
Figure 3: UHNWIs - Distribution by primary source of wealth
Figure 4: General scale of China national individual investable assets, 2006-2011
Figure 5: HNWIs wealth market attractiveness, 2007-2015
Figure 6: The value of investable assets owned by HNWIs in major cities and provinces
Figure 7: HNWIs - Growth in minority and inland regions
Figure 8: Distribution of China HNWIs by profession
Figure 9: HNWIs - Age distribution, 2011
Figure 10: Education background of Chinese HNWIs
Figure 11: Self-evaluations on personal investment experience among HNWIs
Figure 12: Changes in HNWIs risk preference

6. Figure 13: HNWIs - Changing trends in total liquid assets (% of total assets), 2007-2015
Figure 14: Chinese HNWIs favorite charity channels
Figure 15: Top investment immigration destinations for HNWIs in China
Figure 16: Diversification of objectives for Chinese HNWI wealth management
Figure 17: Allocation of HNWI assets
Figure 18: Demands for financing
Figure 19: Value-added services demanded by HNWIs
Figure 20: Main criteria for selecting a private bank and wealth management institutions
Figure 21: The information channels for acquiring information on the private banking Industry
Figure 22: Number of private banking centres operated by main market players
Figure 23: The number of private banking clients and the scale of investable assets owned by
these clients in 2010
Figure 24: Chinese HNWIs' selection of private banks and high-end wealth management
institutions
Figure 25: Chinese HNWIs' private bank and wealth management institution selection trends
Figure 26: Trust Asset Scale (CNY bn) in 2005-2011
Figure 27: Trust industry assets as a percentage of GDP
Figure 28: Scale of trust products on real estate industry
Figure 29: Percentage of usage of fund raised by trust products
Figure 30: PE partnership financing structure
Figure 31: Commission charges for third-party consultancy
Figure 32: A pawnshop in Ordos
Figure 33: Chinese GDP growth from 2007
Figure 34: The scale of the capital markets in China
Figure 35: Art category transaction volumes - spring 2011
Figure 36: Global luxury goods market sales, 2003-2010(Euro bn)
Figure 37: Mainland China luxury goods market sales, 2007-2010(Euro bn)
Figure 38: Global luxury goods market sales, 2003-2010 (Euro bn)
Figure 39: Preferred location for buying luxury goods
Figure 40: Brand ranking among customers in Beijing and Shanghai
Figure 41: Luxury goods bought by Chinese HNWIs in 2011
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