China May Become Home to Half the Millionaires in Asia

China’s millionaires may account for about half of the rich people across 10 major economies in Asia and hold more than half of the wealth by 2015, according to a study last year by Julius Baer Group and CLSA Asia Pacific Markets.

The millionaires will more than double in number to 2.8 million, with 1.4 million high net worth people in China, according to a report late last year that covered China, India, Thailand, Indonesia, South Korea, Taiwan, Hong Kong, Singapore, the Philippines and Malaysia.

Chinese millionaires will hold $8.76 trillion of the $15.81 trillion that these countries’ rich are expected to have, it said.

“In terms of the overall amounts of wealth that will increase, it’s very much a China story,” Stefan Hofer, emerging market equity strategist at Julius Baer, said in a press conference held in Hong Kong and reported in Bloomberg

China, the world’s fastest-growing major economy, had 502,000 millionaires last year, according to the report. State and private investments helped drive a 9.5 percent expansion in second-quarter gross domestic product, the government said in July, as growth in industrial output and retail sales accelerated and copper and aluminum production reached records.

Currency Gains

The almost tripling of millionaires’ assets in the 10 nations from $5.6 trillion in 2010 will be also driven by currency appreciation in the region, adding to the economic growth and gains in asset values, according to the report.

The currency gains may create 600,000 new high net worth individuals, or people with more than $1 million of investible assets excluding their primary residence, by 2015, it said.

The study assumes nominal GDP growth of 14.5 percent a year for China, combined with a currency appreciation of 5 percent annually in dollar terms.

India will be the second-biggest market among the 10 economies by 2015, with 403,000 millionaires and a combined $2.5 trillion in wealth, said the report, which excludes Japan. South Korea will be ranked third, it said.

China ‘s economy is picking up again

While the Chinese economy slowed down last year, it has started to pickup again and its long term outlook is outstanding.

 

The good news is that Australia will benefit from this new wealth in a number of ways.

Not only will it ensure the next stage of our resources boom, with a requirement for our natural resources, but these new high net worth individuals are likely to want to invest apportion of their wealth in Australian property as a way of hedging their bets.  Asian investor shave underpinned the success of many of our high rise off the plan apartment buildings and they are likely to continue to do so in the future.

Others will want to holiday in a safe clean modern environment. If we play our cards right Australia could become the playground of the new wealthy class of Asians, just as it was for the Japanese in the 1980’s.

In short…Australia is well positioned geographically and economically for a bright future.

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Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been once agin been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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