BEIJING (AP) -- China's richest people are stepping up investment in U.S. real estate and other foreign assets as they try to preserve their fortunes in the face of a fast-changing economy, a report said Tuesday.
The report by China Merchants Bank and the consulting firm Bain & Co. in China reflects uncertainties about abrupt shifts in an economy in which growth slowed last year to 7.8 percent from the past decade's double-digit rates.
Beijing is trying to shift the basis of growth to domestic consumption and services, reducing reliance on exports and construction that made fortunes for earlier entrepreneurs. Communist leaders have pledged to use taxes and social spending to narrow the huge and politically sensitive gulf between China's small elite and its poor majority.
Investor attitudes are being influenced by "the political environment and possible changes in tax policy," said Chen Kunde, director of China Merchants' wealth management business. They are "switching their focus from deriving more profits to protecting their existing wealth."
Growth in the number of Chinese people with at least 10 million yuan ($1.6 million) in investable assets slowed in 2010-12, according to China Merchants and Bain. The total rose 18 percent over the previous two-year period to 700,000, down from 29 percent growth in 2008-10.
At least 100,000 of those people have more than 50 million yuan ($8 million) while 40,000 have more than 100 million yuan ($16 million), said the report, the third in a series following editions in 2009 and 2011. It was based on questionnaires filled out by 3,300 people and more detailed interviews with about 100 of them and with bank employees.
Sources of wealth for China's financial elite have shifted repeatedly over the past two decades as industries from real estate and manufacturing to the Internet and soft drinks developed.
More recently, entrepreneurs have been squeezed by government policy shifts such as Beijing's effort to rein in surging housing prices. Curbs on real estate purchases and financing have battered revenue for developers.
Almost 60 percent of people surveyed with investments abroad plan to increase them, the report said. Real estate makes up the bulk of investment and top destinations include the United States, Canada, Hong Kong and Singapore.
Half of those who haven't invested abroad plan to start, the report said.
Beijing is encouraging companies and households to invest overseas to diversify the economy. Money flows out of the country are tightly regulated but limits for individual investors have been steadily raised.
China Merchants and Bain caused a stir in 2009 when they reported 60 percent of wealthy Chinese had completed or were considering "investment immigration" — temporary or permanent residency given by some countries to attract investors.
They said they found similar levels of interest in such immigration this year and added that more than 10 percent of people surveyed expect their children to also pursue it.
This week, Australia's government announced a Chinese toy manufacturer and his family have become the first people to receive visas under a program for "significant investors." It requires an investment of at least 5 million Australian dollars ($5.1 million) in the country.
China Merchants Bank: www.cmbchina.com
Bain & Co.: www.bain.com