China in Focus: Regional Wealth Management: Industry Report

China in Focus: Regional Wealth Management

Product Type: Market Research Report
Published by: Datamonitor
Published: November 2002
Product Code: R313-5210

Description

The potential for the provision of financial services within China is clear. However, China is huge country and is heavily regionalized, the financial services industry in general is casting doubts on FSIs’ ability to service the Chinese market with a one size fits all policy. This document is intended to provide in-depth analysis of the potential for the provision of financial services within China on a regional basis, focused on wealth management.• To support FSIs appraisal of China as a potential market for entry and expansion;• To provide an overview of the Chinese financial services market on a national level, with a specific focus on the wealth management market;• To provide an appraisal of the financial services market in the major regions of China, with a specific focus on the wealth management market;• To provide clear conclusions on the key Chinese cities/regions to enter and the critical success/failure factors within wealth management.The overall wealth management market is a clear, and current, opportunity for FSIs in China, however entry requires careful planning. While private banking is heavily restricted until 2006 and thus a relatively closed market, investor sophistication is not yet great enough to warrant wide scale private banking business modelsUrban markets remain the key targets for financial services companies in China. Further movements towards a market led economy is likely to concentrate wealth in urban markets for the short term as regional inequity increases; Guangzhou is a key opportunity for prospective wealth management entrants with a large asset base of affluent individuals and relatively low levels of competition in comparison to other urban markets;In the medium term, asset management and securities business will become the key growth sector in China. However, current constraints such as poor corporate transparency, lack of risk-hedging products together with current regulations imposed on foreign FSIs, maintains banking products and services as the primary short term opportunity for FSIs; Successful business models will need to differ between regions as there are large regional disparities present.This report is the first ever in-depth study of the regional financial services market in China, focused on wealth management.Understand the opportunity for your organization in each major region of China.Prioritize different regional markets for entry or expansion.Appreciate regional disparities in terms of customer demand and preferences, competitive environment and regulationsFull data sets, historic and forecast, covering retail savings and investment assets and the wealth management market in four major regions.Appreciate the strength of local providers of both retail level and wealth management services and formulate effective strategies to fight competition

Table of Contents

Overview

Introduction

The potential for the provision of financial services within China is clear.

However, China is huge country and is heavily regionalized, the financial

services industry in general is casting doubts on FSIs’ ability to service the

Chinese market with a one size fits all policy. This document is intended to

provide in-depth analysis of the potential for the provision of financial

services within China on a regional basis, focused on wealth management.

Scope

• To support FSIs appraisal of China as a potential market for entry and

expansion;

• To provide an overview of the Chinese financial services market on a

national level, with a specific focus on the wealth management market;

• To provide an appraisal of the financial services market in the major

regions of China, with a specific focus on the wealth management market;

• To provide clear conclusions on the key Chinese cities/regions to enter and

the critical success/failure factors within wealth management.

Report Highlights

The overall wealth management market is a clear, and current, opportunity for

FSIs in China, however entry requires careful planning. While private banking is

heavily restricted until 2006 and thus a relatively closed market, investor

sophistication is not yet great enough to warrant wide scale private banking

business models

Urban markets remain the key targets for financial services companies in China.

Further movements towards a market led economy is likely to concentrate wealth

in urban markets for the short term as regional inequity increases; Guangzhou is

a key opportunity for prospective wealth management entrants with a large asset

base of affluent individuals and relatively low levels of competition in

comparison to other urban markets;

In the medium term, asset management and securities business will become the key

growth sector in China. However, current constraints such as poor corporate

transparency, lack of risk-hedging products together with current regulations

imposed on foreign FSIs, maintains banking products and services as the primary

short term opportunity for FSIs; Successful business models will need to differ

between regions as there are large regional disparities present.

Reasons to Purchase

This report is the first ever in-depth study of the regional financial

services market in China, focused on wealth management.

Understand the opportunity for your organization in each major region of

China.Prioritize different regional markets for entry or expansion.

Appreciate regional disparities in terms of customer demand and preferences,

competitive environment and regulations

Full data sets, historic and forecast, covering retail savings and investment

assets and the wealth management market in four major regions.

Appreciate the strength of local providers of both retail level and wealth

management services and formulate effective strategies to fight competition

ABOUT DATAMONITOR

INTRODUCTION

Scope of report

The Wealth Service

Who is the target reader?

How to use this report

Data included in this report

Custom Research

METHODOLOGY

Retail savings and investments

Affluent individuals

OVERVIEW OF FINANCIAL SERVICES IN CHINA

China’s economic environment

Savings and investments and the changing customer

The competitive environment

The impact of WTO

Chinese Wealth Management Market

Historic data appendix

Chinese Wealth Management Market

Chinese Savings and Investment Market

REGIONALIZATION IN CHINESE FINANCIAL SERVICES

Major indicators

Guandong: summary.

Shangahai: summary

Beijing: summary

Key urban markets

Major urban savings and investments

Wealth Management in key urban markets

Regional disparities

Regional competitive environment

Restrictions on private banking will not be lifted untill 2006

Key competitors in Shanghai

Key competitors in Guangzhou

Key competitors in Shenzhen

Key competitors in Beijing

Data appendix

Savings and Investment Markets in Major Cities

Wealth Management Market in Major Cities

Wealth Management Market in Beijing

Wealth Management Market in Shanghai

Wealth Management Market in Guangzhou

Wealth Management Market in Shenzhen

KEY OPPORTUNITIES

Market forecasts

Key conclusions

Forecasted data appendix

Chinese Wealth Management Market

Savings and Investments in Major Cities

Wealth Management Market in Major Cities

Wealth Management Market in Beijing

Wealth Management Market in Shanghai

Wealth Management Market in Guangzhou

Wealth Management Market in Shenzhen

APPENDIX

Definitions

Research methodology

Future readings

Contacts

LIST OF TABLES

Table 1: Gini index, 2000

Table 2: Comparative price levels and GDP per capita, 2000

Table 2: The reliance on cash-based deposits is decreasing but for how long?

Table 4: Examples of agreements between foreign and domestic securities

companies, 2002

Table 5: Key competitors within the Chinese banking market, 2002

Table 6: Examples of agreements between foreign and domestic banks, 2002

Table 7: Examples of agreements between foreign and domestic fund manage

companies, 2002

Table 8: Key competitors within the Chinese fund management market, 2002

Table 9: Key competitors within the Chinese securities and brokerage market,

Table 10: Top ten Chinese securities firms by the number of branches, 2002

Table 11: Key competitors within the Chinese life insurance market, 2002

Table 12: Examples of agreements between foreign and domestic life insurance

companies, 2002

Table 13: Number of affluent individuals in China, segmented by USD liquid band,

1997-2001

Table 14: Aggregate liquid assets of affluent individuals in China, segmented by

liquid asset band, USD m, 1997-2001

Table 15: Aggregate liquid assets of Chinese affluent individuals as a % of

Chinese retail liquid assets, USD bn, 1997-2001

Table 16: Affluent individuals in China as a % of the total Chinese

population,000’s, 1997-2001

Table 17: Retail savings and investments of Chinese individuals segmented by

type, USD m, 1997-2001

Table 18: Key indicators of major Chinese regions, 2000

Table 19: Key competitors in Shanghai

Table 20: Key competitors in Guangzhou

Table 21: Key competitors in Shenzhen

Table 22: Key competitors in Beijing

Table 23: Retail savings and investments in major urban cities, segmented by

city,m , 1997-2001

Table 24: Total liquid retail savings and investments owned by urban individuals

percentage of total Chinese liquid savings and investments, USD m, 2001

Table 25: Number of affluent individuals in major urban areas, segmented

by1997-2001

Table 26: Liquid assets of affluent individuals within major urban areas,

segmented by city, 1997-2001

Table 27: Urban affluent individuals as a percentage of total Chinese affluent

individuals, 000’s, 1997-2001

Table 28: Aggregate liquid assets of urban individuals as a percentage of

aggregate liquid assets of Chinese affluent individuals, USD m, 1997-

Table 29: Number of affluent individuals in Beijing, segmented by USD, liquid

band, number, 1997-2001

Table 30: Affluent individuals in Beijing as a percentage of total Beijing

population 000’s, 1997-2001

Table 31: Aggregate liquid assets of affluent individuals in Beijing, segmented

by liquid asset band, USD m, 1997-2001

Table 32: Aggregate liquid assets of affluent individuals in Beijing as a

percentage of the total liquid retail savings and investments of the total

Beijing population USD m, 1997-2001

Table 33: Number of affluent individuals in Shanghai, segmented by USD, liquid

band, number, 1997-2001

Table 34: Affluent individuals in Shanghai as a percentage of total Shanghai

popul000’s, 1997-2001

Table 35: Aggregate liquid assets of affluent individuals in Shanghai, segmented

by USD liquid asset band, USD m, 1997-2001

Table 36: Aggregate liquid assets of affluent individuals in Shanghai as a

percentage of the total liquid retail savings and investments of the total

Shanghai population, 1997 to 2001

Table 37: Number of affluent individuals in Guangzhou, segmented by USD liquid

bands, number 1997-2001

Table 38: Affluent individuals in Guangzhou as a percentage of total population

Guangzhou, 000’s, 1997-2001

Table 39: Aggregate liquid assets of affluent individuals in Guangzhou,

segmented by USD liquid asset band, USD m, 1997-2001

Table 40: Aggregate liquid assets of affluent individuals in Guangzhou as a

percentage of the total liquid retail savings and investments of the Guangzhou

population, USD m, 1997-2001

Table 41: Number of affluent individuals in Shenzhen, segmented by USD liquid

bands, number 1997-2001

Table 42: Affluent individuals in Shenzhen as a percentage of total population

Shenzhen, 000’s, 1997-2001

Table 43: Aggregate liquid assets of affluent individuals in Shenzhen, segmented

by USD liquid asset band, USD m, 1997-2001

Table 44: Aggregate liquid assets of affluent individuals in Shenzhen as a

percentage of the total liquid retail savings and investments of the Shenzhen,

population of USD m, 1997-2001

Table 45: Chinese FSIs’ forecasted ranking of the most, and least, important

financial products and services at the end of 2007

Table 46: Forecasted population of affluent individuals segmented by liquid

asset 000’s, pessimistic scenario,

Table 47: Forecasted population of affluent individuals segmented by liquid

asset 000’s, neutral scenario

Table 48: Forecasted population of affluent individuals segmented by liquid

asset000’s, optimistic scenario

Table 49: Forecasted aggregate liquid assets of Chinese affluent individual

segmented by USD liquid asset band, USD bn, pessimistic scenario

Table 50: Forecasted aggregate liquid assets of Chinese affluent individuals

segmented by USD liquid asset band, USD bn, neutral scenario

Table 51: Forecasted aggregate liquid assets of Chinese affluent individuals

segmented by USD liquid asset band, USD bn, optimistic scenario

Table 52: Forecasted retail savings and investments of total individuals in

major areas, segmented by city, USD bn, 2002-2007

Table 53: Forecasted total retail savings and investments of individuals in

major areas as a percentage of total savings and investments of Chinese

individuals, 2002-2007

Table 54: Forecasted number of affluent individuals in major urban areas,

segmented by city, 000’s, 2002-2007

Table 55: Forecasted aggregate liquid assets of affluent individuals in major

areas, segmented by city, USD bn, 2002-2007

Table 56: Forecasted number of affluent individuals in urban areas as a

percentage of total Chinese affluent individuals, 000’s, 2002-2007

Table 57: Forecasted aggregate liquid assets of urban individuals as a

percentage of aggregate liquid assets of total Chinese affluent individuals, USD

bn, 2007

Table 58: Forecasted number fo affluent individuals in Beijing, segmented by

liquid asset band, 000’s, 2002-2007

Table 59: Forecasted liquid assets of affluent individuals in Beijing, segmented

by liquid asset band, USD bn, 2002-2007

Table 60: Forecasted number of affluent individuals in Shanghai, segmented by

liquid asset band, 000’s, 2002-2007

Table 61: Forecasted liquid assets of affluent individuals in Shanghai,

segmented by USD liquid asset band, USD bn, 2002-2007

Table 62: Forecasted number fo affluent individuals in Guangzhou, segmented by

liquid asset band, 000’s, 2002-2007

Table 63: Forecasted liquid assets of affluent individuals in Guangzhou,

segmented by USD liquid asset band, USD bn, 2002-2007

Table 64: Forecasted number of affluent individuals in Shenzhen, segmented by

liquid asset band, 000’s, 2002-2007

Table 65: Forecasted liquid assets of affluent individuals in Shenzhen,

segmented by USD liquid asset band, USD bn 2002-2007

LIST OF FIGURES

Figure 1: China’s primary indicators have shown robust growth in the recent

p2002

Figure 2: Despite China’s continuing economic growth its exchange has not

escaped the downturn, 2002

Figure 3: China exhibits high income inequality, 2000

Figure 4: Deposits dominate in the segmentation of the retail S&I market, 1997-

Figure 5: The retail mutual fund industry in China is the fastest growing global

market, 2002

Figure 6: Timeline of WTO impacts, 2002

Figure 7: China’s strong economy continued to create strong growth in individual

wealth across 2000-2001

Figure 8: China’s affluent population has increased by over a million

individuals 1997 to 2001

Figure 9: The growth pattern of Chinese assets has followed the same basic

profile of the affluent population, 2001

Figure 10: Total liquid assets owned by Chinese wealthy individuals amounted

toUSD832 bn in 2001

Figure 11: The wealth distribution amongst affluent individuals remains

concentrated towards the uppermost liquid asset bands, 2001

Figure 12: Regional map of China, 2002

Figure 13: Foreign direct investment is heavily concentrated in the eastern

region,

Figure 14: Top ten Chinese regions in terms of disposable income, 2001

Figure 15: Population statistics of key Urban cities,2001

Figure 16: Chinese FSIs believe that Shanghai represents the greatest

opportunities in financial services in China, 2002

Figure 17: Shenzhen’s savings and investment market is constrained by a

relatively small population

Figure 18: All four key urban markets exhibited robust growth in retail savings

and investments from 1997 to 2001

Figure 19: The four key urban markets represent nearly 40% of the total Chinese

savings and investments, 2001

Figure 20: Affluent investors in Beijing owned USD129.3 billion at the end of

2001

Figure 21: All four of the key urban cities exhibited wealth management market

grates in excess of 10% CAGR from 1997 to 2001

Figure 22: The proportion of total aggregate assets of affluent individuals

located in the key urban markets is decreasing, 2002

Figure 23: Beijing’s affluent population is becoming increasingly diluted, 2001

Figure 24: Shanghai and Shenzhen will be the first to allow RMB business in Nov

2002

Figure 25: The population of Chinese affluent individuals will reach 10.9

million at the end of 2007

Figure 26: Forecast comparison of number and liquid assets of wealthy

individuals 2004

Figure 27: All key urban markets have attractive prospects to 2007

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