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HNWIs optimistic about China market, report shows
High net worth individuals (HNWI) in China have a positive stance on risky assets and are turning increasingly to private banks to meet their financial service needs
The Asset 14 Oct 2014

High net worth individuals (HNWI) in China have a positive stance on risky assets and are turning increasingly to private banks to meet their financial service needs, according to a report on wealth trends in Asia by Julius Baer and Bank of China.

 

Shumin Zhu, executive vice president of Bank of China, commented: "Internationalization of the renminbi is a key element in China's wider economic reform process and Bank of China is at the forefront of this development. As a bank, we are committed to contributing to supporting China's businesses and entrepreneurs, who strive to further develop the country's economy and contribute to the China Dream. The report's findings confirmed that our clients, many of whom are entrepreneurs, are confident about the future of the Chinese economy and investment environment."

 

Boris F.J. Collardi, chief executive officer of Julius Baer Group, said: "Our strategic partnership with Bank of China comes as the economies in the region are becoming increasingly synchronized and financially integrated. It is clear to us that the combination of these factors, together with the internationalization of the renminbi, Asia's growth drivers are evolving rapidly. These are important issues, and our partnership with Bank of China places Julius Baer in a prime, unique and privileged position to engage with our international clients on these matters."

 

Alongside the ongoing coverage of the cost of living in luxury in Asia, this year's Julius Baer - Bank of China wealth report: Asia features a unique survey of a representative sample of Bank of China's onshore private banking clients across the nation.

 

Internationalization is a key theme that echoes throughout the report. Be it from the perspective of HNWI as parents or investors, respondents to the surveys on private banking service and education planning for their next generation expressed clear interests in broadening horizons. This parallels with the joint Julius Baer and Bank of China stance on what is happening in China's economy and broader policy making arena today.

 

With regard to Hong Kong, 12 of the 20 items in the city-specific index were stable or rose over the course of 2014. That being said, the moderation in property prices (which has the single largest weighting of the 20 goods and services) caused the weighted index to decline by -4.7%. On an equally weighted basis, Hong Kong's Lifestyle Index for 2014 was largely unchanged. Notable declines were registered in wine (-28%) and business class flights (-15%). On the other end of the spectrum, luxury hotel rooms prices rose (+10%). The general interpretation of the wide range of price movements this year is in part that China's economy grew at a slower pace in the first half of 2014, before re-accelerating again. The experts conclude that 2014 will be seen overall as an outlier year for the Julius Baer Lifestyle Index, in terms of the wide range of price outcomes.

 

In addition to the Julius Baer Lifestyle Index, which was launched in 2011 tracking the costs of living for HNWI in 11 Asian cities, this year's Julius Baer - Bank of China wealth report expanded its coverage to provide a focused China Lifestyle Index of 12 mainland China cities. The report also examines pivotal shifts in the world's second largest economy and how HNWI in China see private banking as well as the education for their next generation.

 

 

 

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