China saw number of ultra-wealthy individuals rise the fastest globally in 2020, Knight Frank study finds

A woman shops in a Louis Vuitton store during Vogue's 4th Fashion's Night Out: Shopping Night with Celebrities in downtown Shanghai.
PHOTO: Reuters

The world’s super-rich have weathered the Covid-19 pandemic, their numbers increasing last year, particularly in China which saw the fastest gain, according to the latest Wealth Report by property consultancy Knight Frank.

The elite club of people whose net worth exceeds US$30 million (S$40 million) excluding their primary residence swelled by 16 per cent in China in 2020. Sweden, in second place, saw the number of ultra-wealthy residents grow by 11 per cent, just ahead of Singapore on 10 per cent, said the report, now in its 13th edition.

At the other end of the scale, Greece’s ultra-wealthy population declined by a third.

“The number of UHNWI [ultra high net worth individuals] in China has grown by 137 per cent in the past five years and is expected to grow by 46 per cent in the next five years,” said Martin Wong, associate director, research and consultancy, Greater China, at Knight Frank. “By 2025, the UHNWI population in China will reach over 103,000, which would put it firmly in second place worldwide.”

The US is likely to remain the country with the highest number of wealthy individuals, with its current population of more than 180,000 forecast to grow by 24 per cent in the next five years, Wong said.

Equities, which accounted for about a quarter of the portfolios of the super-rich, were a major driver of their wealth in 2020, the study said, as being in lockdown gave them time to better monitor the stock markets.

In March last year, most stock markets crashed by around 30 per cent, but they had since then bounced back, particularly in the US. The S&P 500, for instance, had rallied by 70 per cent.

“Anyone able to time equity sales or acquisitions in line with market movements would have benefited significantly,” the report said.

While more mainland Chinese joined the ranks of the super-rich, not one mainland city made it into the top 10 wealthiest cities in the world. London and New York were tied as the cities that cornered much of the world’s wealth, followed by Paris.

Hong Kong was the top-ranked Chinese city, landing in fifth spot. Beijing was 11th in the rankings, while Shanghai was in 14th place.

“The City Wealth Index takes into account various factors including wealth, investment and lifestyle offerings of UHNWIs in different cities. The leading mainland cities such as Beijing and Shanghai are in the top 10 in terms of wealth and lifestyle, but both cities are outside the top 10 in terms of investment,” Wong said. “These are compared to the top 10 cities which consistently rank high in all three aspects. Scoring low in the investment category would suggest the cities have a relatively low number of top global firms headquartered, and small domestic investment.”

Though Paris has always been regarded as the luxury capital of the world, Hong Kong has actually more high-end retail outlets for selected brands than the French capital, the report noted.

Despite a restructuring of the retail landscape in Hong Kong, it is likely to keep its high-end shopping crown.

“Going forward, Hong Kong will remain in the top few places in this criteria, despite a change in retail sales structures and visitor travel patterns,” Wong said.

This article was first published in South China Morning Post.