China's mega rich to top combined GDP of South Korea, Taiwan: report
Staff Reporter 2013-01-24 08:51
The number of China's ultra high net worth individuals is on the rise, according to Wealth-X. (Photo/Xinhua)
The net wealth of China's mega rich will be greater than the GDP of South Korea and Taiwan combined this year, according to Wealth-X, a Singapore-based company specializing in business development solutions for ultra high net worth individuals.
Wealth-X recently released eight predictions for the Year of the Snake for China's ultra high net worth individuals, defined as people with more than US$30 million in investable assets or a disposable income exceeding US$20 million. China had approximately 11,000 people fitting this description in 2012 and this number is expected to grow to 12,250 in 2013.
One of the most eye-opening predictions that illustrates the growing wealth of China's ultra high net worth population is that their combined net worth will increase by 8% and reach US$1.7 trillion in 2013, more than the GDP of South Korea and Taiwan combined. According to the IMF, in 2011 South Korea recorded a GDP of US$1.1 trillion, while Taiwan had a GDP of just under US$470 billion.
Another interesting prediction is that luxury spending will increase to US$7 billion, or US$570,000 per Chinese ultra high net worth individual, but that this figure is actually significantly lower than their American counterparts, who are each expected to spend US$1,350,000 on luxury items this year. Conversely, America's mega wealthy will also give more to charity, with per capita donations of US$410,000 compared to US$165,000 for the Chinese.
Wealth-X also predicted that the amount of private aircraft owners in China will to double to over 150, which is still less than 1% of private jet ownership in the US, and that real estate holdings of ultra high net worth individuals in China will top US$150 billion and account for 36% of the total real estate holdings in Asia currently.
By the next Year of the Snake in 2025, Wealth-X predicted, the combined net worth of China's ultra high net worth individuals will hit US$4.1 trillion, surpassing the projected collective wealth of similar individuals from New York, London and Paris.
Commenting on the report, Wealth-X CEO Mykolas Rambus said: "As China makes the transition to an economic model based on domestic consumption, 2013 is set to be a prosperous year for the Chinese ultra high net worth population. In particular, we expect to see the private jet industry take off due to the surge in demand for private aircraft as new status symbols."
