Measuring the true number of millionaires in China can be a tricky business, but a new report by Boston Consulting Group (BCG) asserts that China has now surpassed Japan to reach second place on the list of the countries with the most millionaires in the world.
Defining millionaire status as holding US$1 million in total liquid wealth—meaning stocks and cash but not real estate, collectibles, or luxury items—BCG’s Global Wealth 2014 Report published on Tuesday finds that China’s total number of millionaire households reached 2,378,000 in 2013. This represents a staggering 82 percent growth rate and 49.2 percent increase in private wealth. The number is second only to the United States’ 7,135,000 millionaire households, and has risen from an estimated 1.5 million in China in 2012.
BCG attributes the rapid increase to China’s growing shadow-banking sector, which saw PRC trusts grow by 81 percent. Meanwhile, the country’s volatile stock market was not a wealth generator, with a 6.8 percent loss over the past year.
While China is expected to remain second to the United States in its total number of millionaires through at least 2018, the country’s rapid wealth accumulation is predicted to make Asia the world’s second-wealthiest region this year and the wealthiest in 2018, when BCG predicts it will surpass North America.
When it comes to ultra-high-net-worth (UHNW) households, or those with $100 million or more, BCG concluded that China has a total of 983. The country also has the second-highest number of billionaires in the world behind the United States, according to the Hurun Global Rich List published earlier this year. The total number of Chinese billionaires is expected to overtake those of the UK, Russia, France, and Switzerland combined by 2023.