December 2009 / January 2010 - Association of Dutch Businessmen

Business
Rich, Richer, Richest: Wealth and
Private banking in China
By Willem Anne Hoekstra and Frank Kuijsters
Wang Chuanfu Zhang Yin Xu Rongmao Huang Guangyu
The number of Chinese US$ millionaires is expected to cross 450,000 by the end of the year, with
their total assets under management hitting $1.73 trillion. Despite the global economic downturn,
their wealth still expanded this year, creating growing opportunities for Private Bankers. In comparison:
it will take another 4 years for the market in the rest of the world to regain 2007 levels. The global
wealth dropped 11.7 percent last year to $92.4 trillion.
China is arguably the most explosive wealth market in the world, as rising income and a high
savings rate are likely to continue. The number of millionaires in China is expected to reach 800,000
over the next four years.
Wealth is very concentrated. Half of it is owned by only about 0.1% of the households, in particular
in the regions Guangdong, Beijing, Shanghai and other coastal provinces. Although these millionaires
saw growth, the total wealth in the country fell by 2.3 percent to $3.41 trillion last year, as the country
witnessed volatile stock markets, plunging exports and fluctuating property prices throughout the crisis.
Competition to service these customers grows. In 2007, foreign banking giants like HSBC, Citibank
and BNP Paribas, have set up private banking operations.
Of the local banks, Bank of China was the first Chinese bank to launch private banking business. It has
now established private banking centres in 15 regions and last year bought the Geneva-based Heritage
Fund Management. The Industrial and Commercial Bank of China, the nation’s largest bank by assets
and retail network, will expand its private banking network from the current five cities to 10, to cover
other economic regions like Yangtze River Delta, Pearl River Delta and central China.
Rich Richer Richest
The 2009 - list of richest people in China counts 130 dollar-miljardairs. In 2004
there were only 3 multimillionaires. The number 1 of 2009 is Wang Chuanfu, executive of
BYD (electric cars). He has 5.1 billion dollar. Last year he was number 103 on the list, with
only 880 million dollar.
The investment of the American investor Warren Buffet has been good for his wallet.
The richest man of 2008, Huang Guangyu, founder and then boss of white goods shops
Gome, was with 6.3 billion dollar richer, but he is currently in prison and has disappeared
from the list of richest people in China.
The top ten richest are together worth 45.3 billion dollar, last year that was 40.1
billion. Only three of the top ten of last year are back in the list. In 2004 the top ten had
together “only” 7.9 billion.
This year 6 out of 10 are in real estate developers. Last year only 4 were in real estate.
If we look at the top 100 richest people in China, you could be in 2004 on the list if
you had 100 million dollar, in 2009 you need that to be in the top thousand. Last year you
needed at least 1 billion dollar to be in the top 100.
The economical crises had only a slight impact on the total.
Peking has at least 143.000 euro millionaires – 9 out of 1.000 inhabitants and almost
9.000 who have more than 10 million euro. Shanghai’s in China’s second biggest city with
116.000 millionaires – 6 out of 1.000 inhabitants and almost 7.000 who have more than
10 million euro.
Vol.19 • No. 10 • December 2009 / January 2010