Mainland, meet money
(reference : “Mainland, meet money” by Jasper Moiselwitsch in the ‘South China Morning Post’ magazine, ‘Net Worth’, April 2011)
As China’s wealth grows, it still looks to Hong Kong for expertise in raising capital.
For all the angst of the times, it is easy to forget that Asia is in the middle of an unprecedented wealth boom.
Nowhere more so than in mainland China. A Credit Suisse report notes China is the third largest wealth generator in the world, behind the US and Japan (the report was compiled before the recent tsunami disaster), and that China’s household wealth is expected to double by 2015, to US$35 trillion.
There are more than 800,000 US dollar millionaires in mainland China, according to the Credit Suisse report. It adds that China’s wealth is 35 per cent greater than Europe’s wealthiest country, France, and close to five times the wealthiest country.
:: World wealth pyramid ::
How the world’s wealth is split into four tiers…
No. of adults Balance of wealth
24m US$69.2 trillion (35.6% of world’s wealth)
334m US$85 trillion (85%)
1.05b US$32.1 trillion (16.5%)
3.04b US$8.2 trillion) (4.2%)
:: Total Household wealth ::
Japan 21 (pre-tsunami crisis)
As it stands, the mainland Chinese are very much in a mode of wealth accumulation. Wealth management (i.e. all the issues involved in preserving capital, bequeathing wealth, setting up trusts and endowments etc.) is largely secondary to the objective of getting richer. This is unsurprising, given mainland wealth is so new.
“Every weekend mainland Chinese come into Hong Kong to buy real estate and shop for international banking services that are not readily available in China yet,” said Marcel Kreis, head of private banking Asia Pacific, Credit Suisse. He addis: “The mainland Chinese are looking at wealth creation. They are looking for banks that can lend, they are looking at investment banking to help them raise capital. These are the main demands,” says Kreis. “On the investment side they also definitely buy funds. But they buy it as a product. They don’t buy it as a holistically advised asset allocation process.” That said, the concept of private banking is starting to take hold on the mainland. For now, the focus is on capturing mainland clients in offshore hubs such as Hong Kong.
For the most part, however, the banks looking at mainland China realise the agenda is about wealth creation. And the agenda is best addressed in Hong Kong, for the time being.
My thoughts and words
The population of China have been poor for so long, surely it’s about time now? Yes, Imperial China had the rich elite, but that was for the long term raising and development of a vast country and its people.
China realised that it is impossible for everyone to be wealthy all at the same time, but everybody must take part in the creation of a country, of a world. Thus, they chose to raise part by part (very sensible, very logical, very workable, but also very thorough and steady, yet slow and confusing over the short-term) and established, at first, geographical areas called ‘Special Economic Zones’ for rapid economic development for wealth creation.
Then, it established ‘Special Administrative Regions’ for governance and regulation. Only now, after centuries and multi-millennia of hopes, dreams and doggone hard work is it finally coming to fruition.
China pillaged, plundered and exploited its people to work for the benefit of the majority – there were a lot of short-term sacrifices to enable a better long-term world. The people of China are very hungry in a multitude of ways, but the overall magnitude had to be controlled and thus it is not as terrible a situation as it could have been.
China never wanted to be number 1 all the time, it was just what occurred. The people strived. They were the oldest. It is tough to lead the way, very tough. Fortunately, some rewards are coming through. It’s been a long time coming.
As China gave out and traded with poorer countries to give opportunities, others also pillaged and plundered China’s resources and it was left further deprived. It is only now, after multi-millennia, is it starting to reap. It was for the safety of the people, the country, the world. The growth and development of all for better lives and better living. I’m so glad there is the start of some reward coming through for more people, finally.