China puts Asia on fast track for riches

Region's private wealth soars 31pc to US$37tr, reflecting gains by Chinese families

PUBLISHED : Wednesday, 11 June, 2014, 1:15am
UPDATED : Wednesday, 11 June, 2014, 1:15am

Rich Chinese helped make Asia the fastest-growing region for affluent families as the increase in global wealth accelerated last year, according to a study by Boston Consulting Group.

Private wealth in the Asia-Pacific region excluding Japan jumped 31 per cent to US$37 trillion in 2013, supporting a 15 per cent advance to US$152 trillion globally. That outpaced 8.7 per cent growth in 2012 and provided a boost to companies that oversee funds for the rich, the firm said in its 14th annual report on the subject.

"Wealth managers globally had another outstanding year of growth in 2013," BCG said. "The Asia-Pacific region accounted for the strongest growth."

China leapfrogged Germany and Japan in the past five years to trail only the US in a ranking of countries by private financial wealth. China's US$22 trillion is expected to increase more than 80 per cent to US$40 trillion by 2018, while the US may grow to US$54 trillion from US$46 trillion over the same period, BCG said.

Globally, stockmarket gains averaged 21 per cent last year, providing the primary driver of growth in private wealth, especially in North America, Europe and Japan, according to BCG. North American wealth gained 16 per cent to US$50.3 trillion.

Wealth managers globally had another outstanding year of growth

"Equity markets were up huge last year and that impacted the total wealth in the world," said Brent Beardsley, a BCG senior partner and co-author of the report. "Looking forward, we see much more muted growth."

The number of millionaire households in the world jumped to 16.3 million in 2013 from 13.7 million in 2012, according to the report. Emerging markets created new millionaires, even while a 5 per cent decline in the MSCI Emerging Markets Index dented existing invested assets.

Alongside China's soaring growth, faster-growing countries include India, which may more than double private wealth assets to US$5 trillion by 2018, and Russia, where wealth may advance more than 80 per cent to US$4 trillion.

The pace of growth in Latin American wealth was little changed compared with a year earlier after an increase of 11 per cent to US$3.9 trillion. It is expected to climb 8.8 per cent a year until 2018, compared with an 11 per cent annual increase in the Asia-Pacific region.

Over the next five years North America, western Europe and Japan are all expected to lag the world's average annual growth in wealth of 5.4 per cent.

Assets from Asian millionaires will help Hong Kong and Singapore encroach on Switzerland as the world's No1 offshore private-banking centre.