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The Industrial Bank and Hurun Report today jointly released the China Passion Investments White Paper 2013
HurunReport        2013-04-15        Back

 

2.8m Dollar Millionaires in China, up 4% yoy, Growth Slowest in Last 4 Years

56% of Chinese Millionaires Look to Passion Investments as Alternative to Real Estate and Stocks

 

China Passion Investments White Paper 2013

Jointly Published by the Industrial Bank and Hurun Report

 

 

l  The number of dollar millionaires in China grew 4% to 2.8m individuals

l  The number of super-rich Chinese, defined as individuals with CNY 100m, grew 2% to 64,500 individuals, the slowest growth in the past four years.

l  Private business owners and golden collar workers each make up 35% of dollar millionaires, each up 5% yoy, whilst real estate investors and stock market investors each make up 15% of dollar millionaires, down 5% each.

l  Beijing is home to more millionaires than any other city in China, accounting for 475,000 dollar millionaires, followed by Shanghai with 390,000.

l  Tianjin was the city with the fastest growing number of millionaires, up 10.4%. Inner Mongolia saw a net decrease in dollar millionaires, down 3% yoy.

 

l  56% of Chinese millionaires divesting to Passion Investments, with percentage investing into property and stocks lowest for five years.

l  Art is most popular passion investment, followed by jewelry, jade, fine wine and watches.  Within art, classical Chinese paintings most popular, followed by porcelain and oil painting

l  On average, Chinese millionaires started investing in passion investments in 2008

l  Word of mouth most important for passion investments: 65% influenced by word of mouth.

l  For fine wine investments, most important were the vintage for 81% of respondents, followed by label for 77% and region for 66%.

l  For watch investments, most important were brand for 73%, handcraftsmanship 62% and country of origin 54%

l  16% of the dollar millionaires say they plan to charter a private jet within three years

 

 

(15 April 2013, Shanghai) The Industrial Bank and Hurun Report today jointly released the China Passion Investments White Paper 2013. The 80-page report sets out the size of the market of Chinese luxury consumers, together with an analysis of their passion investment preferences and trends, based on the results of a survey of 1219 dollar millionaires from around the country.

 

This is the second year Hurun Report and the Industrial Bank have released a report on the size of the Chinese luxury consumer market, analyzing the number of dollar millionaires in China and number of super rich, defined as individuals with personal wealth of CNY 100 million (equivalent to US$16 million).

 

The report classifies passion investments to include art, fine wine, jewelry, jade and watches.

 

This is an English language summary of the full Chinese press release which can be found at www.hurun.net. For media enquiries please contact our public relations team whose contact details can be found at the end of this report.

 

 

Despite China's GDP increasing 7.8% last year, the growth of dollar millionaires in China has risen only 4% year on year to 2.8 million individuals, on the back of government policies designed to cool real estate prices and the lackluster performance of the Chinese stock market.

 

Super rich Chinese, defined as those with assets of over CNY 100 million, increased by 2%, to 65,400 million individuals.

 

 

Chen Jinguang, Industrial Bank VP, said, “Industrial Bank is committed to customer’s demands and to provide high-quality and efficient financial services. The China Passion Investments White Paper 2013 gives the reader a comprehensive understanding of the investment status and trends of China's dollar millionaires and super rich, also enhances the development of the large retail and private banking of industrial bank.”

 

 

Xue Ruifeng, Industrial Bank Private Banking Department General Manager, said, " The characteristics of Passion investment allows the private banking to tailor different packages for various customers, which reflects the personalized asset allocation service concepts of private banking. Insightful research into the passion investment demands of China’s high net worth individuals can contribute to the healthy and sustainable development of the private banking.”

 

 

Rupert Hoogewerf, Hurun Report Chairman and Chief Researcher, said, “The number of dollar millionaires in China has grown at its slowest rate in the past four years as a result of a slow-down in the economy and increased concentration of wealth.”

 

 

Geographical Distribution of dollar millionaires in China

17% of Chinese dollar millionaires are based in Beijing, followed by 16.8% based in Guangdong.

 

Tianjin’s dollar millionaire population grew by the greatest margin, up 10.5% on last year. Inner Mongolia is the only place that now has less dollar millionaires than before, down 3% in 2012 compared to 2011.   

 

The number and distribution of dollar millionaires in China

Rank

Region

Dollar Millionaires

National Share

Year on year Increase

1

Beijing

475,000

17%

3.3%

2

Guangdong

469,000

16.8%

3.1%

3

Shanghai

390,000

13.9%

5.4%

4

Zhejiang

375,000

13.4%

1.4%

5

Jiangsu

208,000

7.4%

5.1%

6

Fujian

107,000

3.8%

1.9%

7

Shandong

105,000

3.8%

7.1%

8

Liaoning

80,000

2.9%

1.9%

9

Sichuan

68,500

2.4%

5.4%

10

Tianjin

47,500

1.7%

10.5%

Source: China Passion Investments White Paper 2013, by Industrial Bank and Hurun Report

 

 

Report sound bites

The implementation of housing market cooling policies has had a definite impact on the creation of dollar millionaires in China last year.

 

Real estate prices are up 4.1% yoy across the country, whilst first and second tier cities has seen growth of 4.6%, according to a report by the Shanghai E-House Institute based on real estate prices from over 70 cities as of December 2012.

 

Real estate is the preferred investment vehicle of choice with 76% of respondents, followed by stocks with 65%. Passion investments, as an alternative investment choice, is in third place with 56%, showing a significant increase on last year.

 

For passion investments, art is most popular, followed by jewelry, jade, fine wine and watches. Within the category of art, classical Chinese paintings is most popular, followed by porcelain and oil painting.

 

The risks of passion investments, including weak liquidity, high transaction costs, lack of market standardization and regulatory bodies and higher knowledge requirements continue to put off some would-be investors looking to diversify their assets. 

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