China: “It’s a win-win story.”

Date: 11 Nov 2015

Bumblebee Design

“Typically, Chinese clients are founders and owners of sizeable and listed companies, with international exposure,” says Michael Yong-Haron, managing director and head of North Asia at RBC Wealth Management. “UHNWIs in China tend to be ‘asset-heavy’ and ‘cash-light.’ This is understandable because they are still in accumulation mode and their own companies and businesses will give them a higher rate of return on their capital.”

Despite this, Hubert Tse, senior partner at Chinese law firm Boss & Young in Shanghai says: “We are seeing a lot more family offices being established, and more demand for advisers and financial services offerings to really help high net worth individuals invest the wealth they have built.”

He adds: “In the past, China’s property market was the only real option for investment, but more recently stocks have become a viable alternative option. There is also a lot more demand for investment opportunities in overseas real estate, whether for emigration purposes or for schooling children internationally. We see an increase in purchasing top-end residential real estate in Vancouver, New York, London and elsewhere.”

The Chinese have become increasingly keen to move their money out of China this year, in the wake of turbulent domestic stock markets, which saw the total value of equities listed in China drop by around $4 trillion over the summer, and then the devaluation of the currency followed. But, simply putting money to work in other jurisdictions is not an option: the Chinese government still maintains relatively strict exchange controls that limit the movement of money overseas.
There are signs of liberalisation of exchange controls, though, and Chinese company owners have long been able to…To read the full article, please subscribe to our e-magazine.