Investment€¦ · Optimistic about the Future Financial Situation 84% of Chinese investors were optimistic about their future financial situation. Their concerns on future financial

Investment

© 2016 Beyond Summits

2

Summary：

• 84% of Chinese investors were optimistic about their future financial situation. Thus, their

desire to invest became increasingly stronger. Cash investment accounted for the largest

proportion of all Chinese portfolio investment. In addition，general insurance, stock, and fund

were main products in China's personal investing and financing markets.

• In 2015, Internet-based investment and financing has sprung up, with its market scale at close

to CNY2 trillion. The proportion of females was a little higher than males in China’s Internet-

based financing market. Moreover, China’s Internet-based financing was most used by people

aged 25-30 years old. Various families tended to have similar preference for Internet-based

investment and financing. The products such as YuEbao was the first choice for all families，followed by P2P.

• The crowd funding has become a new way of investment among young people. As of the end

of 2015, the amount of China's crowd funding products has reached CNY3.07 billion, while JD

and Alibaba were the dominant players.


3

Summary：

• China’s high net worth households amounted to 2.07 million in 2015，and were expected to

reach 3.88 million in 2020. China’s high net worth individuals’ investable assets have increased

by 15% for recent years. It was estimated that China’s high net worth individuals’ total

investable assets would exceed the general families in 2020.

• China’s high net worth individuals were mainly composed of entrepreneurs, real estate

speculators, professional investors and gold collar workers. What they valued most was

whether they can control the risks. Overseas property was the most popular investment. In

addition, fixed-income products, overseas stocks, industry, insurance and funds were also

favored by investors.

• With the advantages of investment, immigration and education, the United States has become

the first choice for China’s high-net-worth individuals’ overseas investment, accounting for

73.7% of the total. The United States was also the primary country for China's high-net-worth

individuals to buy property abroad, accounting for 66.17% of the total. Better investment and

children's education were the main purposes to buy houses abroad.


4

84%82%

95%

0%

20%

40%

60%

80%

100%

Chinese Average Level ChineseMillennial Generation

Chinese Investors Who haveInvestment Advisors

Proportion of Chinese Investors Who Were Optimistic about the Future Financial

Situation

84% of Chinese investors were optimistic about their future financial situation. Their

concerns on future financial risks were mainly about the high living costs, inflation and

sluggish economic situation.

Source：2015 Global Investor Intention Survey

51%

45% 43%

40%

25%

0%

10%

20%

30%

40%

50%

60%

High Cost of Living Inflation Economic Situation Health Cost Volatility in StockMarket

Financial Risks Chinese Investors Concerned


5

39%

26%

10%9%

16%

0%

10%

20%

30%

40%

Cash Stock Real Estate Bond Others

Asset Allocated by Chinese Investors

Cash investment accounted for the largest proportion among all Chinese portfolio

investment.

Source：2015 Global Investor Intention Survey


6

Stock

Main Products in China’s Personal Investment and Financing Market

Source：China’s Personal Financial Market Research Report (2016)

Low HighMid Risk

Low

Mid

High

Potential

Benefits

General

Insurance

Monetary

Fund

Dividend

Insurance

Bank

Finance

Universal Life

InsuranceGold

Investment

Crowd

FundingTrust

Asset

Management

Real Estate

Fund

P2P

Equity

Fund

Unit-linked

Insurance

ExchangeFutures

Private

Equity


7

Bonds and currency markets instruments, cash and bank payment and non-

standardized bond asset were the main allocation of China's personal investment,

accounting for 89.1% of the total.

Bonds and Currency Markets Instruments, 51.0%

Cash and Bank Payment, 22.4%

Non-standardized Bond Asset, 15.7%

Equity Investment, 7.8%

Others, 3.1%

Asset Allocation of Bank-Financing Products by End of 2015

Source：China’s Personal Financial Market Research Report (2016)


8

The main allocation of trust fund investment include industrial and commercial

enterprises, stock markets and financial institutions. It should be noticed that the stock

market grew rapidly by 6.2%.

Commercial and Industrial Enterprise, 22.5%

Stock Market, 20.4%

Financial Institution, 17.9%

Basic Industry,17.9%

Real Estate Industry, 8.8%

Others, 12.6%

Asset Allocation of Trust Fund Investment by End of 2015

Source：China’s Personal Financial Market Research Report


9

The monetary fund accounted for more than 50% of the public fund in China. Thus, the

cash management products with high liquidity and low risk were very popular in China.

Closed-end Fund, 2.3%

Monetary Fund, 52.93%

Mixture Fund, 26.54%

Bond Fund, 8.30%

Equity Fund, 9.12%

QDII Fund, 0.79%

Open-end Funds, 97.7%

Distribution of Public Funds by End of 2015



10

By end of 2015, the original premium collected by the insurance companies was close

to CNY2.43 trillion, ranking the third in the world. The proportion of life insurance was

more than 67%.

Property Insurance,

32.9%

Life Insurance, 54.53%

Health Insurance, 9.93%

Personal Accident Insurance, 2.62%

Personal Insurance,67.1%

Distribution of Original Premium Collected by Insurance Companies (By end of 2015)



11

918.5

1,778.5

2,348.5

3,353.9

4,393.8

7,332.5

8,614.8

0

3,000

6,000

9,000

2009 2010 2011 2012 2013 2014 2015

The Number of Chinese Individuals Investing on Gold in 2015 (‘000)

In recent years, the number of Chinese individuals investing on gold has grown fast,

reaching 8.62 million in 2015. The proportion of the under-CNY10,000 transaction per

day has the largest share at 38.8%.

>10,000, 0.3%

1,000-10,000, 4.4%100-1,000, 20.0%

10-100, 36.5%

<10, 38.8%

Chinese Individuals’ Gold Transaction Volume

Per day in 2015 (‘000)



12

China’s Internet-based investment and financing market has sprung up, reaching

CNY2 trillion in 2015.

CNY2

Trillion


The net value of balance financing

products(Money fund) was more than CNY1

trillion by end of 2015.

The financing balance of P2P lending was more

than CNY500 billion by end of 2015.

Internet-based original premium income was

CNY223.4 billion by the end of 2015.

Total crowd-funding was CNY 3 billion by end of

2015.


13

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

＜￥50,000 ￥50,000-100,000 ￥100,000-200,000 ￥200,000-500,000 ＞￥500,000

Internet-based Investment and Financing by Households in China

Internet-based Insurance Products such as YuEbao Crowd-Funding P2P Lending

Various families tended to have similar preferences for Internet-based financing. The

products such as YuEbao was the first choice for all families, followed by P2P.


Number of Families

(‘000)

Annual Household

Income


14

China’s Internet-based financing was very popular among people of 25-30 years old.

The proportion of female investors was a little higher than males.

≤ 24 years old, 19.2%

25-30 years old, 44.3%

31-35 years old, 14.5%

36-40 years old, 6.4%

≥ 41 years old, 15.6%

Distribution of China’s Internet-based Financing Investors by Age

Source：China’s Internet-based Financial Market Research Report

Male, 49.5%

Female, 50.5%

Distribution of China’s Internet-based Financing Investors by Gender


15

China’s Internet-based financing investors were concentrated in prefecture-level, and

most of them had received good education.

Beijing/Shanghai/Guangzhou/Shenzhen, 19.3%

Other Capital Cities, 31.7%

Prefecture-level Cities,

29.5%

Counties, 4.2%

Villages, 9.7%

Others, 5.6%

Distribution of China’s Internet-based Financing Investors by Region

Primary and Below, 1.1%

Junior Middle School, 11.9%

High School, 15.8%

College, 30.9%

Bachelor, 35.8%

Master and Above, 4.5%

Distribution of China’s Internet-based Financing Investors by Education



16

Most of China's Internet-based financing investors had lower-middle income.

＜￥2,000,

20.0%

￥2,000-

3,999, 39.7%

￥4,000-

7,999, 25.3%

￥8,000-

11,999, 6.2%

≥12,000, 8.8%

Distribution of China’s Internet-based Financing Investors by Monthly Income

Freelance, 32.9%

Staff, 26.3%

Civil Servant, 13.0%

Student, 12.4%

Worker/Service Industry,

8.9%

Unemployed, 2.5%

Others, 4.0%

Distribution of China’s Internet-based Financing Investors by Occupation



17

8.27.1 6.5 6.7 7.2

9.9 10.2

12.3

9.3

14.9

21.0

26.4

0

5

10

15

20

25

30

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

The Number of Active Mobile Users in China’s Internet-based Financing Market (million)

In 2015, the number of active mobile users in China’s Internet-based financing market

increased rapidly, reaching 26.4 million in December.

Source：Investigation on Global Investors (2015)


18

In general, the investment in YuEbao was in a stable status in 2015, reaching

CNY620.7 million in the last quarter of 2015. It was estimated that the total investment

in products such as YuEbao amounted at more than one trillion yuan in 2015 with

more than 0.3 billion users.

711.7

613.4

534.9

620.7

0

200

400

600

800

2015 Q1 2015 Q2 2015 Q3 2015 Q4

Investment in YuEbao in 2015 (billion yuan)

Source：China‘s Personal Financial Market Research Report


19

0.13 1.00 20

100

300

975

0

200

400

600

800

1,000

2010 2011 2012 2013 2014 2015

Transaction Volume of P2P by End of 2015

（billion yuan）

China’s personal investment and financing of P2P has grown rapidly. At the end of

2015, the total number of P2P investors was 0.72 million, and the transaction volume

was CNY975 billion.

50 510

2,300

7,200

0

2,000

4,000

6,000

8,000

2012 2013 2014 2015

The Number of P2P Investors by End 2015 (‘000)



20

1,136.2

933.5

313.4

79.8

73.5

30.0

19.9

18.3

16.1

8.9

Jingdong Finance

Taobao Cool

Suning ZC

Zhongchou

Huanshan

Qingju

Themakers

DREAMORE

Kaistart

Demohour

Fund raising from Major Crowd Funding Platforms by End of 2015（Million Yuan）

As of the end of 2015, the amount of China's crowd funding products has reached

CNY3.07 billion, while JD Finance and Taobao Cool were the dominant players. The

crowd funding has become a new way of investment among young people.



21

39%

59% 56%54% 53% 51% 50% 51%

61%

41% 44% 46% 47% 49% 50% 49%

0%

20%

40%

60%

80%

100%

2013 2014 2015 2016E 2017E 2018E 2019E 2020E

Source of Individual Investable Assets in China

High Net Worth Families General Families

Source：China Private Bank 2016

China’s high net worth individuals’ investable assets have increased by 15% for recent

years. It was estimated that China’s high net worth individuals’ total investable assets

would exceed the general families in 2020.


22

86% 86%

85% 85%85%

85%84%

84%

12%

12%

12%12%

12%

13%

13%

13%

2%

2%

2%3%

3%

3%

3%

3%

0

1000

2000

3000

4000

5000

2013 2014 2015 2016E 2017E 2018E 2019E 2020E

The Number of China’s High Net Worth Households (‘000)

Assets at CNY6-30 Million Assets at CNY30-100 Million ＞CNY100 Million

3,050

2,690

2,3702,070

1,630

3,880

3,450

China’s high net worth families amounted to 2.07 million households in 2015，and

was expected to reach 3.88 million households in 2020.

1,300



23

China’s high net worth individuals were mainly composed of entrepreneurs, real estate

speculators, professional investors and gold collar workers.

Entrepreneur, 55%

Gold Collar Worker, 20%

Real Estate Speculator,

15%

Professional Investor, 10%

China’s High Net Worth Individuals with over CNY10 Million Assets (2015)

Entrepreneur, 75%

Real Estate Speculator,

15%

Professional Investor , 10%

China’s High Net Worth Individuals with over 100 Million Assets (2015)

Source：White Paper on Demand and Trend of Going on Abroad for China’s High Net Worth Individuals


24

43%

30%

26%

22%

19%

15%

7%

44%

40%

21%

23%

6%

7%

9%

Reduce the Impact of RMBFluctuation

High Returns

Asset Security & Secret

Reasonable Tax Planning&Avoidance

Migration

Business Management

Inheritance of Property

The Purpose of China’s High Net Worth Individuals to Invest Overseas

Had Overseas Investment Once Ready to Invest Abroad in the Next Three Years

China’s high net worth individuals mainly invested overseas for maintaining or

increasing the value of their assets. For the individuals who were ready to invest

overseas in the coming three years, their demand mainly focused on asset

appreciation.



25

38%

26%23%

22% 22%20%

12%

9% 9%7%

6% 6%

3%

0%

10%

20%

30%

40%

Overseas RealEstate

Fixed-IncomeProducts

OverseasStock

OverseasIndustries

Insurance Overseas Fund OverseasFamily Trust

Cash AndSavings

Gold Private AndVenture Capital

PhysicalInvestment

Hedge Fund FinancialDerivatives

Overseas Investment Products that Would See a Value Increase Next Year

House property was the most popular investment item overseas. Other items favored

by investors include fixed-income products, overseas stocks, real industry, insurance

and funds.



26

70.3%

64.9%

51.4%

48.3%

28.2%

25.8%

Methods of Risk Control

Real Income

Reliable InvestmentInstitutions

Risk Assessment

Prospect

Service

Factors That Influence Investors’ Choices on Overseas Investment Products (2015)

What overseas investors valued most was whether they can control the risks.



27

77.0%

47.0%

33.3%

31.2%

31.2%

27.0%

21.2%

17.0%

3.9%

Bank

Securities / Funds / Futures Company

Insurance Company

Trust Company

Professional Wealth ManagementAgency

Internet-based Financial Institution

Investment Team

Family Office

Others

Channels of Overseas Financial Investment (2015)

Banks and securities were the main channels for Chinese high net worth individuals to

conduct overseas financial investment.



28

Services expected by most china’s high net worth individuals included investment

advisory and financial products’ supply.


63.0%

43.5%

31.2%

27.5%

15.9%

8.7%

0%

10%

20%

30%

40%

50%

60%

70%

Investment Advisory Providing Financial Products Lecture/Training Activities Loan Financing No Need

Most Expected Services for Overseas Financial Investment


29

73.7%

16.5%

14.1%

14.1%

12.0%

10.8%

7.2%

7.2%

6.9%

2.1%

2.1%

US

Singapore

UK

Australia

Japan

Canada

Germany

Switzerland

France

New Zealand

South Korea

Popular Overseas Countries for Financial Investment

With the advantages of investment, immigration and education, the United States has

become the first choice for China’s high net worth individuals to make investment in,

accounting for 73.7% of the total.



30

66.1%

13.9%

9.6%

5.2%

4.5%

3.5%

3.5%

3.3%

2.6%

1.7%

US

Australia

Canada

UK

Japan

Germany

Singapore

New Zealand

Switzerland

Spain

Top10 Countries for Chinese to Buy Property

United States was also a popular destination for China's high net worth individuals to

purchase property in, accounting for 66.17% share in all the major countries.


55.5%

16.9%

16.5%

15.0%

11.8%

11.8%

4.3%

3.9%

3.1%

2.8%

US

UK

Australia

Singapore

New Zealand

Canada

South Korea

France

Spain

Germany

Countries that Chinese Investors Plan to Buy Property in for the Next Three Years


31

74.9%

56.1%

42.2%

37.6%

7.6%

Investment

Children'sEducation

Immigration

Residence

Health Care

Purpose to Buy House Abroad

For China‘s high net worth individuals, they buy house abroad mainly for the purpose

of better investment and children's education.


52.8%

47.8%

34.9%

26.9%

22.3%

14.3%

13.0%

9.0%

Asset Allocation

Children's Educationand Residence

Daily Residence

Vacation

Rent

For the Aged

Immigration

Health Care

Use of Houses Bought Overseas


32

40.3%

45.1%

9.2%

5.4%

1

2-3

4-5

≥6

The Number of Overseas Real Estate

Most China’s high net worth individuals had less than 3 overseas real estate, mainly

including apartments and villas.


57.4%

47.0%

7.8%

7.0%

3.5%

3.5%

2.6%

Apartment

Villa

BusinessOffice Building

Shop

Hotel

Chateau /Castle

Farm / Ranch

Type of Overseas Real Estate


33

In the coming few years, 56.6% of China's high net worth individuals will maintain the

number of current overseas property, 30.5% will continue to buy and 12.9% will sell

some of them.

56.6%

Maintain the Current Situation

30.5%

Continue to Buy

12.9%

Sell



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Investment€¦ · Optimistic about the Future Financial Situation 84% of Chinese investors were optimistic about their future financial situation. Their concerns on future financial