CHINA'S USD MILLIONAIRES SET TO DOUBLE

Source: Shanghai Daily

The number of United States-dollar millionaires in China is set to nearly double in five years, luring private bankers eager to help them invest an expected combined wealth of more than USD7.6 trillion by 2013, Boston Consulting Group said yesterday.

Global wealth declined last year for the first time since 2001, BCG said, but the number of Chinese individuals with household financial wealth of more than USD1 million may grow to 788,000 by 2013 from 417,000 in 2008.

"We believe that China's wealth market offers an attractive window of opportunity for banks," Frankie Leung, a BCG partner in Hong Kong, told reporters in Beijing. "How banks should act to capture the opportunities and establish competitive positions would be a key strategic issue to explore."

Overseas banks, including HSBC Holdings Plc, Citigroup Inc and Bank of East Asia, have all started private banking businesses on the Chinese mainland, competing for affluent clients with local rivals such as the Bank of China.

According to BCG's definition, financial wealth includes cash, equities and bonds but excludes real estate and privately owned enterprises.

Globally, total assets of rich individuals fell by 11.7 percent to USD92.4 trillion in 2008 due to the global financial crisis, the first drop since 2001, but BCG expects growth to resume over the next few years.

"It will take roughly five years for the wealth pools to recover from the crisis and to reach a level that is comparable to wealth growth in 2007," said Holger Michaelis, a partner and managing director of BCG.

He added the financial crisis has made rich people favor simple, less risky investments to protect, rather than grow their wealth.