Number of rich Chinese families stays steady

Luna Sun in Beijing: The number of rich families in China remained largely unchanged last year, according to a new report, as Beijing puts greater emphasis on tackling inequality under “common prosperity”.

China had 5 million “affluent” families with net wealth of at least 6 million yuan (US$838,000) in 2021 and 2.06 million “high net wealth” families worth more than 10 million yuan, according to the report published on Sunday by the Hurun Research Institute and Citic Prudential.

Some 130,000 Chinese families had net wealth of at least 100 million yuan, the report said.

The figures represent a marginal change from 2020, when 5.01 million families were recorded with a net worth of more than 6 million yuan, 2.02 million were worth over 10 million yuan and 130,000 families had more than 100 million yuan.

Beijing had the highest concentration of well-off Chinese, with some 298,000 households holding more than 10 million yuan in net wealth.

Shanghai had 262,000, Hong Kong had 211,000, while there were 79,000 and 71,000 in Shenzhen and Guangzhou, respectively.

The number of high-net-worth families was growing fastest in the southern tech hub Shenzhen at 4.4 per cent year on year, while the number in Hong Kong fell by 5.4 per cent last year compared with 2020.

While Beijing was the city with the largest number of high-net-worth families, the provincial manufacturing powerhouse Guangdong commanded even more.

The total assets of China’s high-net-worth families rose from 126 trillion yuan in 2020 to 160 trillion yuan in 2021, according to the report.

It is estimated that 18 trillion yuan will be passed on to the next generation within 10 years, while 49 trillion yuan of wealth will be passed on to the next generation within 20 years.

The report comes amid a push by President Xi Jinping to tackle inequality within China, which saw inequality increase sharply as the economy boomed from the late 1970s onwards.

Xi pledged in his work report to the 20th party congress last month to bring per capita disposable income to new heights and “substantially grow the middle-income group as a share of the total population” by 2035.

He also emphasised the need to raise the share of personal income and increase sources of revenue, while saying issues such as employment, education, medical services, child and elderly care and housing should be addressed.
China’s Communist Party has elevated “common prosperity” to a priority on its economic agenda.

The country has more than 400 million middle-income earners, or 140 million families, as part of its 1.4 billion population, National Bureau of Statistics commissioner Ning Jizhe said in January when talking about China’s economic performance last year.

Widening socioeconomic inequality has become increasingly evident in China amid growing economic headwinds, which have been exacerbated by Beijing’s stringent zero-Covid strategy.

Xi’s report to the 20th party congress signalled more robust regulation to narrow inequality in China and some have perceived his comments as a “warning” to the wealthy.

Perhaps not surprisingly, the survey also found that 97 per cent of high-net-worth individuals are concerned about family inheritance, and about 40 per cent have started planning for it.

On average, the Chinese taking part of the survey put about 30 per cent of their wealth towards family inheritance, followed by spending on private wealth investment, education for future generations, consumption needs and retirement. Around 8 per cent is donated to charity. (South China Morning Post)