The number of Chinese high net worth individuals (HNWIs), defined as individuals with at least RMB10 million ($1.6 million) in investable assets, grew to more than 700,000 at the end of 2012, more than doubling since the end of 2008, according to the China Private Wealth Report 2013 co-authored by Bain & Company and China Merchants Bank.

The report also forecasts that China's private wealth market is on pace to increase an additional 20% this year.

Average individual investable assets per HNWI were RMB29 million at the end of 2008, and are estimated to grow to RMB31.8 million by the end of this year, an increase of nearly 10% annually.

There are now 20 provinces in China with HNWI populations exceeding 10,000. Five new provinces and municipals, Heilongjiang, Chongqing, Shanxi, Shaanxi, and Inner Mongolia, are added to the list.

As the wealthy in China become more sophisticated, they are increasingly looking outside of China for investment opportunities. The percent of HNWIs and ultra-HNWIs with overseas investments have roughly doubled since 2011, with half of ultra-HNWIs now invested overseas.

And 60% of those interviewed who have overseas investment now say they expect to increase their overseas holdings.

As they age, the wealthy are also looking at wealth management differently. Wealth preservation, quality of life, and children's education are the top three objectives. Wealth creation, which topped the list in the 2009 survey, dropped to fourth place.

Wealth inheritance planning is also becoming a central issue for the group. One-third of HNWIs and one-half of ultra-HNWIs, defined as individuals with at least RMB100 million in investable assets, are thinking hard about inheritance planning.

"As wealthy Chinese age, they now face a dilemma in how to preserve wealth and leave it to their families," says Jennifer Zeng, co-author of the report and a partner at Bain & Company.

More than half of ultra-HNWIs have expressed interest in establishing family trusts, while 15 percent have already done or started to do so. Most ultra-HNWIs have gained their familiarity with family trusts through their exposure to private banks located in Hong Kong.

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