China's economic rise is producing more and more billionaires.
No one knows precisely when, but somewhere between the middle of 2018 and 2019, China overtook the United States as the country with most people in the top 10% of wealth in the world. While many had predicted such a moment would come, it was a surprise that it occurred during the worst slowdown in the Chinese economy since the global financial crisis.
This is perhaps the most striking takeaway from Credit Suisse’s latest annual Global Wealth Report, which found 100 million Chinese ranking among the world’s richest, versus 99 million Americans. China also managed to create 158,000 new millionaires, bringing its total to 4.5 million. “China’s progress has enabled it to replace Europe as the principal source of global wealth growth, and to replace Japan as the country with the second-largest number of millionaires,” Credit Suisse said in the report. Over the past year, the United States—which remains home to most of the world’s wealth—added 675,000 new members to millionaires’ club, for an overall count of 18.6 million; Japan produced 187,000 newcomers to achieve a total of a little over 3 million. Germany, the Netherlands, Brazil and India were also among the big gainers.
As the rich grow richer, however, poor households in most countries aren’t faring much better than in the past. This is particularly true for China, where World Bank data show that about 27% of the citizens, or an estimated 372 million people, continue to live on less than $5.50 per day, below the World Bank’s poverty line for China. Inequality in China has been rapidly increasing, says Terry Sicular, professor of Economics at the University of Western Ontario. “The emergence of superrich families … can be positive in a setting with well-functioning markets, strong legal structures and a level playing field,” he says. “However, if these conditions do not hold, the consequences can be distorting both economically and politically.”