China Close to Having 1,000,000 Millionaires

by Amit Ben-Yehoshua and Steve David Salem

China’s new rich has well and truly established itself with a recent report published by GroupM Knowledge – Hurun Wealth Report 2011 indicating that the Chinese mainland has 960,000 millionaires with a personal wealth of 10 million yuan ($1.5 million) or more.

Of the million, approximately 60,000 have been defined as ‘super rich’, owning 100 million yuan ($15 million) or more – showing a growth of 9.7% year-on-year. Within this 60,000, the report showed that around 10,000 are residents of Beijing with 7,800 living in Shanghai.

In addition, the average age of Chinese millionaires was shown to be 39, around 15 full years younger than Western counterparts. This clearly displays the stage at which Chinese residents are making their money, with 55% said to be earning from private businesses and 20% earning from speculating on China’s rocketing property market. One of the main reasons why the number of Chinese millionaires has recently began to rocket has been a combination of rising property prices as well as the increase in growth and GDP on the mainland.

Recently, a range of extravagant purchases made by affluent Chinese millionaires has been documented by a variety of news sources. For instance, earlier this March a white jade seal once used by Emperor Qianlong (ruler from 1735-1796) was sold to a Chinese bidder for RMB 119 Million ($18 Million). In addition, Xinhua news announced that two decade-old liquor bottles of Moutai and Wuliangye were auctioned for $224,000 and $782,00 respectively. A bottle of Moutai off the shelf today would cost around 800 yuan ($120) and Wuliangye 595 yuan ($96).

However, this report should come with a pinch of salt. China has been plagued by severe, unequal wealth distribution with a large proportion of the population living in poverty. Thus, in order for China to succeed in the future it must turn its attention away from the rich and focus on the poor in order to build a lasting and meaningful economy.

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