China’s private banking industry: Introduction


China’s private banking industry 中国私人银行业 Part I

The opening of China’s economy and subsequent financial deregulation has given rise to a whole generation of wealthy individuals.  In many ways, these investors differ from in the West.  Average age of mid-thirties and their confidence in their own judgement while considering investment decisions.  As oppossed to the Japanese and Western private wealth market, they tend to be first generation wealth and to trust their friends and own gut instincts as opposed to using professional wealth advisors.  They also are more heavily weighted in the domestic stock market and real estate market.

Although foreign banks launched private banking services as early as 2007, they have failed to gain significant market share as they focused on old money and subsequent generations of wealth.  In 2008, Chinese equities took a major hit along with the global market and the real estate market temporarily declined from the early boom.  However, the crisis has proved to be an amazing opportunity as it gave Chinese newly wealthy individuals a clear view of market volatility and forced them to rethink investing without the help of professionals.  Most have become significantly more risk averse and, intent on maintaining family wealth, have looked outside their group of friends and families to professional portfolio managers.


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