💾 Archived View for gmi.noulin.net › mobileNews › 5026.gmi captured on 2022-06-11 at 21:55:30. Gemini links have been rewritten to link to archived content
⬅️ Previous capture (2021-12-03)
-=-=-=-=-=-=-
By Bryan Borzykowski
China s economic growth may be starting to slow, but that s not stopping its
wealthiest citizens from cashing-in and spending their hard-earned salaries.
Many Chinese are getting richer and their free-flowing funds are being spent
around the world, according to several recent research reports.
From Vancouver to New York, London, Paris and Hong Kong, shopping mall sales
assistants are seeing more Chinese shoppers scoop up designer handbags than
ever before, while real-estate agents are fielding calls from tycoons looking
for living spaces with good feng shui.
Many of the newly prosperous are using the weeklong national holiday for Lunar
New Year this month to fly overseas. China National Tourism Administration,
estimates the number of Chinese outbound tourists will reach 8.5 million for
this year's holiday, up 13% from the 7.5 million travellers the previous year.
An increasing number are joining the ranks of the super rich. The number of
Chinese with more than 3.03bn Chinese yuan ($500m) in assets will grow by 6%
this year to 535 people, according to a recent report by Wealth-X, a
Singapore-based company that collects data on ultra high net-worth individuals.
Other studies have shown that the country s high net worth population people
with more than 10m Chinese yuan ($1.6m) is also climbing. Between now and
2015, the country s high net-worth group will swell from 800,000 people to
about 1 million, estimates US-based global management consulting firm Bain &
Company.
Where s all this money coming from? Massive economic growth, said Mykolas
Rambus, Wealth-X s CEO. For most of the last decade, the country s gross
domestic product has grown by about 10%a year by comparison, US GDP growth
has only exceeded 3% twice since 2003 and it s been business owners who ve
been able to take the most advantage of that rapid expansion.
China has been the workshop of the world and the individuals who capitalised
on that trend have done very well, Rambus said.
Young and affluent
Due to its rapid economic gains, China s wealth boom has occurred over the last
decade. As a result, most of the country s richest citizens are young and
experiencing wealth for the first time. This is in direct contrast to countries
such as the UK and US, where more money has accumulated by being passed down
from generation to generation.
This new Chinese elite are also younger than their counterparts in Europe and
North America. The average age of the high net-worth group is between
40-years-old and 50-years-old, compared with 50-years-old and 60-years-old in
other countries, said Jennifer Zeng, a Beijing-based partner at Bain & Co.
As fast as China is expanding, it will still be a while before its high
net-worth population overtakes America s, which, according to Wealth-X, remains
home to the highest number of rich people in the world.
Currently, there are about 65,500 American ultra high net-worth individuals
people with more than $30 million in assets compared to China s 10,675.
The US is still quite far ahead, but that s because the US economy is more
developed, said Tjun Tang, a Hong Kong-based partner and managing director
with the Boston Consulting Group. It may or may not happen, but we will
continue to see increasing numbers of high net-worth individuals and a
broadening of that wealth in China.
Ripple effect
All this newfound money is having a ripple effect around the world.
For starters, home prices in hot urban areas, such as Vancouver, London and New
York are soaring as Chinese buyers swoop in, said Zeng. In a recent survey she
conducted with 3,000 high net-worth Chinese, 30% mentioned real estate as one
of the top three investments they ll make overseas.
One reason many wealthy Chinese are scooping up homes outside of China is asset
diversification. It is also a way to get their money out of the country, said
Rambus.
Many of the well-to-do are worried the government will, at some point, come
after their riches. There s always a concern around what having extreme wealth
in China means as it becomes more visible, he said. Are you at risk of
running afoul of party guidelines?
Foreign businesses are also in demand, said Tang. In Europe, high net-worth
Chinese are seeking vineyards and chateaux.
It started out in real estate and it s spread to businesses, he said.
More wealth has also been a boon for companies that sell luxury items, whether
it s big name brands such as Gucci, Burberry and Louis Vuitton or smaller
operations such as Coach.
China has become an extremely important market for luxury goods companies,
said Tang. It s absolutely critical for some of these top end brands to be
there.
What exactly this Chinese high net-worth growth story means for the world
long-term isn t clear, but there are two things for certain, said Rambus
people are getting richer and they re spreading that money globally.
More (wealthy) Chinese are coming somewhere near you, he said. Whether that
s in leisure or in business, we ll see an increased number of Chinese growing
businesses, experiencing new places and putting down roots.