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June 22, 2021

Growth in the Chinese wealth market will drive affluent population growth in 2021

By GlobalData Financial

The China wealth market remains resilient and will continue to grow despite the impact of COVID-19, driving the Chinese mainland affluent population growth.

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Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

As ground zero of the COVID-19 pandemic, China was always going to suffer some ill effects in its own retail savings and investments markets in 2020. The exceptionally strong growth in financial assets enjoyed by the affluents in China in recent years did see a slight dip in early 2020, as its early pandemic control measures bit into economic activity, while its trade dispute with the US caused additional disruption.

This population, including mass affluent investors (holding liquid assets of $50,000–1m) and high-net-worth individuals (holding liquid assets of more than $1m), is expected to grow by 9% to reach 58.2 million in 2021.

According to GlobalData’s Wealth Markets Analytics, the number of affluent individuals in China recorded an average annual growth rate of 9.3% between 2016 and 2020, rising from 36.6 million in 2016 to 53.5 million in 2020. The country is home to the largest affluent population in Asia and the second largest globally, behind only the US.

While China was affected by COVID-19 initially, the country was among the few to have suppressed the virus to a large extent. With negligible infections, a relatively early resumption of domestic economic activity, a stimulus deployed by the government, and increased exports in the manufacturing sector, China was able to sustain a marked rebound in its overall saving and investments market in the second half of 2020.

This supported some of the most robust growth in an affluent population seen anywhere in the world in 2020. China’s wealth resilience was aided by its heavy bias towards deposits in its retail investment markets, a common-enough feature of developing markets and one that shielded many from the loss of wealth suffered by equity investors elsewhere.

However, GlobalData anticipates a slight shift away from deposits among Chinese investors towards equities and mutual funds once the pandemic subsides completely. The Shanghai Stock Exchange Composite Index recovered from the losses incurred earlier in the year, with the stock market index registering a 13.9% growth in 2020, fuelling an appetite for riskier assets among mainland investors. This will support the rosy forecast GlobalData has pencilled for China in 2021.

This year is expected to be strong for investors, including the affluent Chinese. Even though China began its recovery earlier than the rest of the world, its economy and financial markets will continue to expand, supported by its recent modest financial liberalisation, which increases foreign access to its capital markets.

Free Report
img

Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

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