China's wealthy sitting on 101 trillion yuan cash pile

There were 3.16 million high-net-worth individuals - each with more than 10 million yuan (HK$10.8 million) in investable assets - in China last year, wielding a total of 101 trillion yuan of liquid assets, according to a report by China Merchants Bank (3968).

Concentrating on wealthy provinces in the eastern part of the country, these individuals' investable assets, on average, reached over 31 million yuan as of the end of last year, the lender's report with consulting firm Bain & Company showed.

Nearly 90 percent of them maintained a moderate or low-risk appetite in light of the pandemic and the sluggish stock market last year, with almost 60 percent allocating their assets to cash and fixed-income products, the report said.

But the proportion of people willing to increase their exposure to high-yield and high-risk investments in the coming two years is on the rise, with some tending to put their money in alternative investments like gold, and to expand investment in private equities while trimming that in real estate sector, it noted.

The average age of the wealthy population is getting younger too, almost half of the rich individuals being under 40, up by 7 percentage points from that of 2021, the study showed.

In terms of industries, the survey showed the proportion of professionals increased whereas that of those in the new economy sector dropped due to the shrinking market cap of internet companies.

The places with over 100,000 rich individuals last year included Guangdong, Shanghai, Beijing, Jiangsu, Zhejiang, Shandong, Sichuan, Fujian and Hubei.

The report forecasts the number of high-net-worth individuals to grow at an average compound growth rate of 11 percent in the next two years, versus 10 percent between 2020 and 2022 and 15 percent in 2018-2020.

Liquid assets held by all individuals across the country may grow at a CAGR of up to 9 percent in the coming two years and the total sum may reach 300 trillion yuan by 2024.

At 101 trillion yuan, high-net-worth people owned more than 36 percent of the nation's investable assets at the individual level in 2022.