A study by Swiss bank UBS and PricewaterhouseCoopers (PwC) has revealed that one new billionaire in China is created almost each week. At this rate, the number of billionaires in Asia will overtake that of the US in 10 years, says Francis Liu, managing director of UBS wealth management.
That Asia will be at the center of global commerce – and soon billionaire wealth creation – comes as no surprise given the region’s economic expansion and growth in the property and stock markets in recent years, but the numbers in the report are still staggering.
There are over 1,300 billionaires from 14 countries around the world collectively worth US$5.4 trillion, more than the gross domestic product of Japan, the world’s third largest economy. Among these billionaires, 917 are self-made (did not inherit wealth), with the US topping the ranking at 47%, Asia second with 36%, and Europe coming in third with 17%. About 300 of 500 Asian billionaires come from mainland China, with Hong Kong contributing 60 and Taiwan 46.
A high proportion of the billionaires are entrepreneurs who are still very much involved in the family business. Most may think that real estate investment is the main source of billionaire wealth creation in Asia. In fact, real estate is second only to wealth created from the consumer sector, the report says. Other sources include digital technology and new infrastructure.
On average, Asian billionaires are 10 years younger than their American and European counterparts. Those older than 60 years old should be at the stage where they are planning on how to preserve and transfer their wealth. Nevertheless, the report warns that “without a clear and sensible governance and strategy, wealth can swiftly dilute over generations, through death, divorce and taxes.”