Decades of rapid growth have, self-evidently, made Chinese richer. Over the course of this millennium alone, the average net worth of a Chinese adult has risen from $5,672 to $22,230, according to the new edition of Credit Suisse’s Global Wealth Report. Even allowing for the appreciation of the yuan against the dollar over that time, that represents robust growth in real wealth.
After a year in which they collectively acquired $1.4 trillion of new wealth, second only to the U.S.’s $8 trillion gain, Chinese now account for 9.2% of the world’s wealth, Credit Suisse reckons (vs China’s 11.25% share of global GDP). That is the third largest share after the U.S. and Japan. France would come next with 5.9%.
The distribution of that wealth is more even than in other large economies. Fewer than six in ten Chinese adults now have a net worth of less than $10,000, the report says. For India, the corresponding ratio is 94%. The world average is just shy of 70%.
Millions have been lifted out of poverty, and up to the next rung. Almost two out of five Chinese adults have a net worth of $10,000-$100,000, compared to a world average of one in five. Above that level, China falls dramatically below the world averages; just 2.5% of Chinese adults have a net worth in excess of $100,000, but the size of the population makes the raw numbers large. China has more than 1 million dollar millionaires, Credit Suisse reckons. It also has more ultra-high net worth individuals (residents with a fortune of more than $50 million) , at 5,830, than any country except the U.S., though the U.S. has nearly eight times as many.
Credit Suisse also notes that wealth inequality in China “has been rising strongly, however, with the increasing wealth of successful entrepreneurs, professionals and investors”. An anecdotal indication of that is that China had just one known billionaire at the turn of the century, and now has more than 60.
Though the pace of wealth creation in China has slowed with the slowing of the economy, Credit Suisse expects China to be a significant driver of wealth acquisition over the next five years. The bank forecasts that global wealth will grow by 40% over that time, with China alone accounting for one-seventh of that growth, largely driven by the growing wealth of the middle classes, which now account for more than one third of the global middle-class, and particularly if the economy is successfully rebalanced towards domestic consumption.
China could account for 58% of the middle tier by 2018, Credit Suisse says. If those forecasts come good, that would leave Chinese accounting for 10.2% of global wealth by then. On a per adult basis, wealth would increase by $12,100 to $34,400 and the number of millionaires double to 2.1 million. Chinese adults have “a very high chance” of moving up at least one wealth tier over the next 30 years, and “a very small probability” of dropping down one, Credit Suisse concludes.