China making millionaires faster than US
The U.S. capped its 10th straight year of household wealth growth and is set to remain the world’s biggest hub for rich individuals even as China starts to close the gap, according to Credit Suisse Group.
North America led worldwide gains for average growth in household wealth per adult, rising 5.5 percent to $391,690 in the 12 months through midyear, the Zurich-based bank said Thursday in its Global Wealth Report. The U.S., meanwhile, contributed most to global wealth during that period by adding $6.3 trillion, and it topped the report’s rankings for minting new millionaires.
This is the ninth edition of the Global Wealth Report from Credit Suisse’s Research Institute, an in-house think tank set up after the credit crisis to study long-term economic trends. Based on data from adults in 200 countries, the organization’s latest research provides perspective on the factors driving wealth changes across rich and poor countries.
The Federal Reserve’s quantitative easing program, low interest rates and tax cuts introduced under President Trump’s administration have all helped to drive the country’s household wealth since 2008, according to the report. The U.S.’s position as global leader in wealth growth comes despite China’s surge, with UBS Group estimating a new billionaire is minted in China every two days and Asia now home to around a quarter of the people on the Bloomberg Billionaires Index, a ranking of the world’s 500 richest.
China’s total wealth has risen 1,300 percent this century to $51.9 trillion, more than double the rate of any other nation. Although the U.S. will remain a world leader in the number of millionaires, reaching as many as 20.5 million over the next five years, Credit Suisse forecasts that China will mint new seven-figure fortunes at more than three times the rate over the same period.
“China has advanced so rapidly this century that a wealth gap that once appeared unassailable could vanish within a generation,” the report said.
Global wealth overall grew on average by 4.6 percent to $317 trillion during the 12 months to mid-2018. Despite concerns over trade tensions between U.S. and China, Credit Suisse noted a positive wealth outlook for both countries. Average U.S. household wealth is 35 percent above 2006 levels, while the bank downplayed concerns of China’s growing levels of household debts.
“Since the global financial crisis, wealth inequality has trended upward, propelled in part by the rising share of financial assets, and a strengthening US dollar,” Anthony Shorrocks, a British economist and one of the report’s authors, said in a statement. “These underlying factors appear to be waning, so it seems more likely that wealth inequality will fall in future rather than rise.”