China will create millionaires over 3 times faster than US in 5 years
published : 23 Jun 2021 at 13:55
writer: South China Morning Post
HONG KONG: China will create millionaires at a quicker pace than the United States in the five years through 2025, as a rapid recovery from the world's worst public-health crisis in a century helps corporate chieftains generate and accumulate wealth faster, according to the 12th Global Wealth Report by Credit Suisse.
The number of US dollar millionaires in China will increase by 92.7% to 10.17 million by 2025, compared with a 27.8% rise in the US to 28.06 million US dollar millionaires over the same period, according to a projection by the Swiss lender.
"The rise of China's wealth between 2000 and 2020 is almost equal to the 80 years of growth of wealth in the US from 1925 until 2005," Anthony Shorrocks, an economist and the report's author, said in a video conference on Tuesday. "We are expecting very solid growth in wealth in the years ahead, in both China and India."
The Credit Suisse report is an annual study compiled from data on the wealth holdings of 5.2 billion adults in about 200 countries, and is the most comprehensive wealth report globally. And it says that China will retain the world's second-largest population of wealthy people, ahead of Japan, France and Canada, and behind just America.
Of the total global wealth gain of US$28.7 trillion last year, China contributed US$4.2 trillion, the report said. The world's second-largest economy had 9.4% of the world's millionaires in 2020 at 5.3 million, behind only the US, which had 39% of millionaires worldwide, or 22 million millionaires. Japan ranked third with 6.6%.
Hong Kong ranked among the top five in terms of both wealth per adult and density of millionaires. It ranked third after Switzerland and the US in terms of average wealth - at US$503,340 - per adult last year.
The city continued to rank fourth-highest worldwide in terms of the density of millionaires, with 8.3% of its adult population US dollar millionaires, after the US (8.8%), Australia (9.4%) and Switzerland (14.9%), in 2020. While Singapore ranked 11th with 5.5%, China came in at 23rd with 0.5% because of its huge population of 1.4 billion people.
Hong Kong, however, reported a drop from 560,000 millionaires in 2019 to 520,000 last year, which was mainly due to a currency depreciation, according to Credit Suisse. The lender was positive about the outlook for Hong Kong, and expected its millionaire population to increase by 60% in the next five years to 831,000.
Moreover, global wealth last year was not hurt by the coronavirus pandemic, as central banks globally issued supportive measures to boost the economy, said Nannette Hechler-Fayd'herbe, chief investment officer, international wealth management and global head of economics and research, at Credit Suisse. China had experienced strong growth in online consumption and learning, which supported its growth, she added.
The surge in household wealth reflected gains in mainland China's stock markets and house prices. The country had a better control on the pandemic and had a stronger recovery than other markets. China's economy, the world's second-largest, grew by 18.3% year on year in the first quarter of this year, government data shows. In comparison, Hong Kong's economy grew by 7.9%, while the US economy expanded by 6.4%.
And while China may be behind in terms of millionaires, its billionaire population has overtaken that of the US, according to a separate report.
China surpassed the US last year to become the first country with more than 1,000 US dollar billionaires, according to the latest Hurun Global Rich List 2021 released in March. It had 1,058 billionaires last year compared with the US's 696. Of the 610 newly minted billionaires globally, 318 were in China, compared with 95 in the US, based on January 15 valuations, Hurun said.