The Chinese market is exploding with new high-net-worth individuals (HNWIs), according to a recent report released in Beijing by Bain & Co. and China Merchants Bank (CMB).

The number of Chinese HNWs with asset of US$1.6 million stood at 700,000 at the end of 2012, which is twice as much what the number amounted to four years ago, according to the report said.

The new Bain & Co. and CMB also forecasts that the number of HNWs will increase by 20% in 2013.

The average individual investable assets per high-net-worth person amounted to US$4.7 million at the end of 2008, and is on track to grow to US$5.2 million by the end of 2013, informs the report.

Currently, 20 provinces in China have high-net-worth populations exceeding 10,000, and five new ones have joined the group since 2010.

Heilongjiang has benefitted from natural resources and the reform and development of industrial bases. Chongqing got a boost from the development of central and western regions and coastal businesses that have relocated to the west. In Shanxi, Shaanxi and Inner Mongolia HNWs increased as a result of growth in the coal and natural resources industries.

Jennifer Zeng, Bain partner in Beijing and co-author of the report, said: "High-net-worth individuals in China have been very successful in creating wealth. But as wealthy Chinese age, they now face a dilemma in how to preserve wealth and leave it to their families. This presents many opportunities for banks serving the private wealth market in China, if they can effectively respond to these emerging needs."

Sameer Chishty, Bain partner in Hong Kong and global head of the firm’s wealth management and private banking practice, said: "They have stronger needs in mid- and long- term wealth planning, and have rising demands in wealth preservation and inheritance.

Chishty added that HNWIs’ demands in investment management have become "more sophisticated".