The exponential growth of the super-rich Chinese boosted global billionaire wealth to US$8.9 trillion last year, a 19% increase from 2016 and the highest level in history, according to a UBS report released Friday.

China minted two billionaires every week in 2017, with the total number from the country reaching 373. Their combined wealth expanded by 39% year-over-year to US$1.12 trillion. For context, there were only 16 billionaires in China in 2006.

“China is currently the leading country for entrepreneurs to create wealth. Nowhere else has the combination of the world’s largest population, supportive government policies, rapidly liberalizing economy, and technology innovation,” says John Mathews, head of ultra-high-net worth Americas at UBS Global Wealth Management.

Globally, there were 2,158 billionaires in 2017, up 179 from a year ago. The Asia Pacific region accounts for 711 billionaires, already surpassing the 682 in the Americas. At this rate, Asian billionaires will be wealthier than their American counterparts in three years, UBS said in its fifth annual edition of the Billionaires Insights report, New Visionaries and the Chinese Century.

However, the Americas region still had the largest concentration of billionaire wealth in 2017, growing 12% year-over-year to US$3.6 trillion. In Europe, billionaire wealth grew 19% to US$1.9 trillion.

The U.S. accounted for US$3.1 trillion in billionaire wealth. But wealth creation is slowing in the country, creating just 53 new billionaires in 2017 compared to 87 five years ago.

Although the technology, consumer, and retail sectors remained robust, there were not enough IPOs last year to generate many billionaires, which is the opposite of what’s  happening to Chinese technology companies, Mathews says.

A potential U.S.-China trade war, as well as global economic uncertainties, will likely impact the markets and billionaire wealth creation, says Mike Ryan, Americas chief investment office at UBS Global Wealth Management.

“We expect the bull market to continue, but we need to pay close attention to global dynamics that could post disruptions in coming months, such as further rate hikes, slowing growth in China, and trade disruptions,” he says.

By Fang Block
Barrons


China ‘creates two billionaires a week’

China produced billionaires at the rate of two a week in 2017, says a report by Swiss bank UBS and auditors PwC.

The number of billionaires in the country saw a net increase from 318 to 373, with a joint wealth of $1.12 trillion (£874bn), said the survey.

The report said China was currently the leading country for entrepreneurs to create wealth.

Worldwide, total billionaire wealth rose 19% to a record $8.9tn, shared among 2,158 individuals.

But the report also cautioned that China’s billionaires have a high turnover.

It said 106 people became billionaires but 51 dropped off the list, illustrating the risks of doing business in China.

“Over the last decade, Chinese billionaires have created some of the world’s largest and most successful companies, raising living standards,” said Josef Stadler, head of ultra-high net worth at UBS Global Management.

“But this is just the beginning. China’s vast population, technology innovation and productivity growth combined with government support, are providing unprecedented opportunities for individuals not only to build businesses but also to change people’s lives for the better.”

UBS and PwC said there were already more billionaires in Asia than in the US. On present trends, they would be wealthier than their US counterparts within three years.

There were only 16 Chinese billionaires as recently as 2016, the report said, but now nearly one in five billionaires worldwide was Chinese.

It said 97% of the Chinese billionaires were self-made, many of them in sectors such as technology and retail.

The report said the Americas region was still home to the largest concentration of billionaire wealth, but wealth creation was slowing. In 2017, the US created 53 new billionaires, compared with 87 five years ago.

In western Europe, the number of billionaires went up by 17 to 414 in 2017.

BBC

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