Hurun Research Institute released the Hurun Wealth Report 2014, which provides a detailed analysis of the number of high net-worth individuals and their geographical distribution in China.

This is the sixth year in a row that the Hurun Research Institute has released the report. 

• The country has 1,090,000 millionaires and 67,000 super-rich, an increase of 3.8% and 3.7% respectively from last year. After last year’s growth rate of millionaires and super-rich dropping to the lowest point in five years, the growth rate has increased again this year.
• Beijing had the highest number of high net-worth individuals (HNWIs), followed by Guangdong, and Shanghai in third place. Tianjin had the fastest growth rate of millionaires and super-rich.
• Chinese millionaires can be divided into 4 categories: private business owners, professional stock market investors, real estate investors and high-salaried executives. The number of professional stock market investors decreased, whereas private business owners increased by 5%. Chinese super-rich can be divided into 3 categories: private business owners, real estate investors and professional stock market investors.

In 2013, the Chinese economy continued to grow steadily, GDP increased by 7.7%. According to the China Index Research Institute’s figures, the annual house price has increased by 11.5%, the top tier cities’ annual house prices increased by 24%; second and third tier cities’ annual house prices increased by 6.9%. During the same period of time, the Shanghai Stock Index fell by 11%.

By the end of 2013, the number of millionaires (defined as individuals with personal wealth of CNY 10 million, equivalent to US$1.6 million and GBP 1 million) in China’s 31 provinces, municipalities, and autonomous regions, apart from Hong Kong, Macao, and Taiwan reached 1,090,000 - an increase of 40,000 from the previous year, an increase of 3.8%.

Among those figures the number of super-rich (defined as individuals with personal wealth of CNY 100 million, equivalent to US$16 million and GBP 10 million) has already reached 67,000, an increase of 2,500 people within the last year - a 3.7% rise.

Last year the rate of growth of millionaires and super-rich in China was at its lowest point in the last five years. Nonetheless, this year’s figures have improved. The Hurun Research Institute has predicted that in the next three years the number of millionaires could reach 1,210,000 people, and similarly the number of super-rich could increase to 73,000.

The number of millionaires in Beijing this year has increased by 8,000 in comparison to last year, reaching 192,000. Furthermore, there are 600 more super-rich this year than last year, with 11,300 overall, the highest in the whole country. Guangdong was second overall, with 180,000 millionaires and 10,000 super-rich. Shanghai was third, with 159,000 multimillionaires and 9,100 super-rich. Apart from Hebei, Inner Mongolia, Heilongjiang, Liaoning and Shanxi, in all the other provinces and cities the number of millionaires has increased.

Rupert Hoogewerf (right), Chairman and Chief Researcher of Hurun Report, said, “Although we have been seeing a slowdown in spending, the money is still very much there.”

The Top 10 places to live for China’s millionaires

The Top 10 places to live for China’s Super-rich

Types of millionaire

Chinese millionaires can be divided into four categories: private business owners, professional stock market investors, real estate and high-salaried executives.

Private Business Owners �" 55% of the millionaires (600,000 people) have their own business �" a 5% increase since the previous year. Their business account for 60% of their total assets. On average they have their own personal residential property worth over 2 million RMB, cars worth over 200,000 RMB, and more than 1.8 million RMB worth of investable assets.

Professional Stock Market Investors �" for this type of millionaire their main source of revenue comes from stocks and future financial investments. This year the Shanghai and Shenzhen stock markets are still underperforming, so this section accounts for 10% of the millionaires (around 100,000 people) �" a 5% decline since last year. The proportion of their investments in stocks and shares accounts for 30% of their total wealth. On average their personal residential property is worth 4.5 million RMB, and they also own investment property worth 2 million RMB and cars worth half a million RMB.

Real Estate Investors �" 15% of millionaires, or around 160,000 people, invest mainly in real estate and own multiple properties, with no change from last year. Invested properties account for 90% of their total assets, owning personal residential property, cash and marketable securities which increased by about 5% over the past year. They also possess 500,000 RMB worth of cars.

High-salaried Executives �" High-salaried executives include senior executives at major enterprise groups and multinational companies. Their high annual salaries, bonuses and other benefits guarantee them a stable and large income. They account for 20% of the millionaires. Their personal residential property is worth at least 5.5 million RMB. 20% of their wealth is in stocks and negotiable securities. They have cars worth 500,000 RMB.

Types of Super-rich

Chinese super-rich can be divided into three categories: private business owners, real estate investors and professional stock market investors.

Private Business Owners �" Private business owners make up a high proportion of the super-rich �" 80%. Their business accounts for 60% of their total assets, and cash and stocks for 15%. They own personal residential property and investment property worth around 12 million RMB and 8 million RMB respectively. They have on average 4 cars, worth around 5 million RMB.

Real Estate Investors �" Real estate investors account for 15% of the super-rich �" around 10,000 people. Real estate investment accounts for 60% if their total assets. They have around 15 million RMB worth of cash and stock. They also own 22 million RMB worth of personal residential property,

Professional Stock Market Investors �" Professional stock market investors account for 5% of the super-rich. Stock or equities make up the vast majorities of their assets, around 73% of their total assets. They have personal residential property worth 25 million RMB, and cars valued at 2 million RMB.

Methodologies

The Hurun Wealth Report 2014 investigates the quantity and geographical distribution of millionaires and super rich in mainland China. The report details the geographical distribution by province, municipality and directly-controlled municipality, based on the long-term residence of these wealthy people. The basis of the data is calculated up to the 31st December 2013.

The report takes into account both fixed assets and current assets of these wealthy people. Fixed assets include self-owned listed or unlisted stock rights, owner-occupied real estate, and investment real estate. Current assets consist of shares, funds, debenture shares, deposits, insurance etc.

Hurun Report compiled this report using the ‘bottom-up’ and ‘top-down’ research approach. The ‘bottom-up’ research approach takes into account the quantity of high-end real estate across the regions, sales volume of luxury cars in the past three years, individual income tax returns, the registered capital of enterprises and other high-end consumer indicators. The ‘top-down’ research approach is based on indicators such as GDP, GNP published by National Bureau of Statistics, combined with a Lorenz curve model to create a macro statistical analysis.

*Hong Kong, Macau, Taiwan not included

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