China's multimillionaires keen on investment emigration

14:37, April 21, 2011      

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The Personal Fortune of Chinese Report for 2011, issued on April 20, shows that China has about 500,000 people with more than 10 million RMB in investment assets, and their preferences are shifting from investment in domestic real estate to investment emigration.

Investment emigration refers to a phenomenon spurred by policies in certain countries that allow investors to legally reside there or gain citizenship in exchange for a substantial investment. The report, which was issued by China Merchants Bank (CMB), says that 27 percent of China's billionaires have become investment emigrants to foreign countries.

Real estate investment down to 13.7 percent

According to the report, jointly launched by CMB and Bain & Company, people with more than 10 million RMB of available investment assets are defined as "High Net Group (HNG)." And the group's zest for investing in domestic real estate has dropped due to China's housing control policies, which include restrictions on home loans and buying homes.

The report reveals that the proportion of the HNG investing in real estate has decreased by 3.9 percent from 2009 to 2011. More than 90 percent of respondents said they would not increase any investment in real estate, and half of the HNG people are collecting their money back from the housing market gradually.

In addition, even those HNG people who want to keep putting money into the real estate market have changed their ways, too. They are buying more retail shops or investing indirectly through trusts and funds instead of purchasing residences directly.

27 percent of multimillionaires have turned to investment emigration

In recent years, personal overseas assets of Chinese people increase rapidly, and the annual average compound growth rates of that all nearly reached 100 percent from 2008 to 2010.

At the same time, number of Chinese people who invest in businesses overseas has increased quickly. For example, the compound growth rate in last five years for the number of Chinese people who engage in investment emigration to the United States has reached 73 percent.

The upward trend is also proved by the survey. Nearly 60 percent of Chinese multimillionaires who participated in the survey had completed investment emigration or were considering doing so, and 27 percent of Chinese billionaires had already emigrated.

Beijing has more than 40,000 multimillionaires

According to the report, China has about 500,000 multimillionaires now, and 15 provinces and cities of China each had more than 10,000 of such multimillionaires by the end of 2010.

Among these regions, Guangdong Province tops at the list with 70,000. Shanghai and Beijing follow it with 47,000 and 44,000 of multimillionaires, respectively.

First-tier cities and southeast coastal regions in China, such as Guangdong, Shanghai, Beijing, Zhejiang and Jiangsu, have the biggest absolute quantity and increment; while five provinces and cities, including Tianjin, Liaoning, Hunan, Sichuan and Hubei, have the fastest growing speed, growing at 30 percent.

In 2010, the personal available investment assets of China reached 62 trillion yuan, while that of Chinese multimillionaires was 15 trillion yuan, which means those 500,000 Chinese people own nearly a quarter of the whole nation's fortune.

The report also predicts that China's HNG people will reach 590,000 by the end of 2011.

By Wang Hanlu, People's Daily Online
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