China, Asia grow more mil­lion­aires

China Daily (Canada) - - ACROSS AMERICAS - By PAUL WELITZKIN in New York paulwelitzkin@ chi­nadai­

Even as the growth of global wealth cooled a bit in 2015, China and Asia con­tin­ued to out­pace other coun­tries and re­gions when it comes to ex­pand­ing the ranks of mil­lion­aires.

In its an­nual re­port on global wealth, Bos­ton Consulting Group (BCG) said on Tues­day that Asia-Pa­cific (ex­clud­ing Ja­pan), was the only re­gion to post dou­bledigit growth, as the value of pri­vate wealth ad­vanced 13 per­cent to $37 tril­lion last year. China was the main driver of that growth, the BCG re­port said.

When it comes to wealth cre­ation, “China is still the most im­por­tant mar­ket in Asia to­day,” said Mariam Jaa­far, a part­ner in BCG’s wealth man­age­ment prac­tice in Sin­ga­pore.

Asia-Pa­cific will ac­count for about 40 per­cent of future wealth growth through 2020. “The ma­jor­ity of growth will come from up­per high net­worth and high net-worth (HNW) seg­ments,” added Jaa­far.

Bos­ton Consulting de­fines up­per HNW as those with as­sets of $20 mil­lion to $100 mil­lion. HNWs are de­fined as hav­ing as­sets of $1 mil­lion to $20 mil­lion. The af­flu­ent are de­fined as hold­ing as­sets of $250,000 to $1 mil­lion, while ul­tra HNWs have as­sets of more than $ 100 mil­lion, ac­cord­ing to BCG.

Wealthy Chi­nese are fairly con­ser­va­tive when it comes to in­vest­ments and are ex­pected to re­main that way in the future, BCG said. In 2015, the wealthy Chi­nese kept 79 per­cent of their as­sets in cash and de­posits, 16 per­cent in eq­ui­ties, and 5 per­cent in bonds.

By 2020, BCG ex­pects HNW Chi­nese to keep 77 per­cent of their as­sets in cash and de­posits, 19 per­cent in stock and 5 per­cent in bonds.

China’s stock mar­ket tur­bu­lence last year helped to in­crease in­vestor aware­ness about risk and al­ter­na­tive fi­nan­cial as­sets, Jaa­far said. “In­vestors are start­ing to look more at wealth preservation,” she added.

The re­port noted that as­sets un­der man­age­ment for women are ex­pected to grow about 7 per­cent a year to $72.1 tril­lion by 2020, and fe­male in­vestor wealth is grow­ing 1.4 per­cent faster than the growth rate of global wealth.

“I can say that the same trend of faster fe­male wealth growth is true for Asia Pa­cific and is also true for China. We ex­pect a growth of fe­male wealth of 13.3 per­cent in the next five years, ver­sus the over­all growth of 12 per­cent. Sim­i­lar to global trends, Chi­nese women’s wealth is mostly earned through in­her­i­tances, but (is) in­creas­ingly also self-gen­er­ated,” said Jaa­far.

The num­ber of mil­lion­aire house­holds in the world rose 6 per­cent in 2015 to 18.5 mil­lion, ac­cord­ing to the re­port, a slow­down from 11 per­cent growth in 2014. The US is home to the largest num­ber of mil­lion­aire house­holds at 8 mil­lion.

China is sec­ond with 2.1 mil­lion, fol­lowed by Ja­pan with 1.1 mil­lion and the United King­dom with 961,000.

The value of pri­vate wealth in the world grew by 5.2 per­cent in 2015, to $168 tril­lion. That was below the 7 per­cent growth re­ported in 2014. The bulk of global wealth growth last year was driven by the cre­ation of new wealth, rather than an in­crease in the value of ex­ist­ing as­sets. The re­port noted that many eq­uity and bond mar­kets were flat or even slipped in 2015.

Mil­lion­aires now con­trol about 47 per­cent of the world’s wealth and will con­trol 52 per­cent by 2020, BCG said.

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