Number of multimillionaires may hit 320,000 in '09

By Du Wenjuan (chinadaily.com.cn)
Updated: 2009-03-31 18:35

The number of China's wealthiest is expected to expand to an estimated number of 320,000 people by the end of 2009 who own about 9 trillion yuan ($1.29 trillion) in private equity value, says a report released on Monday.

The China Private Wealth Report 2009, co-conducted by consultancy group Bain & Company and China Merchants Bank (CMB), says the group of multimillionaires in the Chinese mainland had expanded to nearly 300,000 in 2008, with the number of the people with private equity worth at least 100 million yuan rose to about 10,000.

The report shows the apparent potential growth of private wealth with a steady momentum despite the global economic crisis.

China's richest group grabbed about a total of 8.8 trillion yuan in equity, or 29 percent of the country's 30-trillion-yuan GDP in 2008. The report also projects an increase of 6 percent in the number of China's wealthiest this year. They will be holding more than 9 trillion yuan, up 7 percent from last year.

Guangdong province, the southern Chinese economic hub, has the nation's largest number of wealthy people, with 46,000, or 15 percent of the country's richest population as of 2008. Shanghai and Beijing follows Guangdong on the list in the second and third place respectively.

The five richest provinces and municipalities are Guangdong, Shanghai, Beijing, Jiangsu and Zhejiang, with over 20,000 people holding more than 10 million yuan each in private equity.

Inspite of their huge amount of personal wealth that the country's poor cannot begin to fathom, the richest remain or tend to abstain from high-risk investments due to the global economic downturn. About 80 percent of the surveyed eyed stocks, cash reserves and equities as their top choices.

The report also relates to the potential for Chinese banks in private banking services. About 70 percent of the country's wealthiest are more careful in dealing with foreign banking services.

The financial crisis and Chinese regulatory barriers both make it difficult for foreign banks to manage their wealth in China, the report says.

The swelling group of the rich has concerned the nation's leadership more in both the income gap and social stability.

The work report delivered by Premier Wen Jiabao in mid-March targets the rural poor at a new standard. The nation sets the new poverty line at 1,196 yuan of per capita annual income, netting a broader 40.07 million, or 0.03 percent of the total population.