China may soon surpass US in multi-millionaire count

Jun 26, 2017, 09:00 am

By Hong Soon-do, Beijing correspondent, AsiaToday

It is estimated that the number of China's multi-millionaires whose personal assets exceed 100 million yuan ($14.67 million) have reached 120,000 at the end of 2016. This is nearly an 35% increase from the 90,000 at the end of 2015. Considering the rate of increase, it is clear that the US, which has about 200,000 multi-millionaires, will soon be overtaken. It seems that not only China itself is becoming a rich country but also its people are becoming rich.

According to Beijing sources on Sunday based on foreign media reports, the explosive growth of multimillionaires seems to be related to the country's continued economic growth. This means that most of the fruits of economic growth rate of around 6.5% a year are enjoyed by multi-millionaires. In addition, the explosion of bubbly real estate market and the presence of the domestic market, which is far larger than the sum of the United States and the European Union (EU), also contributed to the increase of Chinese super-rich.

In this situation, it's natural that the number of billionaires with at least 10 million yuan ($1.47 million) of property is increasing. In fact, the number of billionaires has reached 1.6 million last year, nearly eight times the number a decade earlier. Many of them are likely to join the billionaires club within the next few years.

The sharp rise of the wealthy class naturally leads to a surge in the total amount of China's private wealth, which reached 165 trillion yuan at the end of last year. This represents a more than sixfold increase from a decade earlier. It is estimated to increase to 188 trillion yuan by the end of this year.

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A cartoon that symbolically shows the gap between China's rich and poor people. This seems to be the dark shadow behind the sharp rise of multi-millionaires./ Source: Youth Times

"Let some people get rich first," was the famous instruction of the late Deng Xiaoping, the general architect of reform and openness. As we can see from his dictum, China is indulgent to personal fortunes. Property tax rates and inheritance tax rates in China are quite lower than in advanced countries. It's not an exaggeration to say that China is economically not a socialist country. China is like paradise enough for wealthy people.

However, there are many side effects. For instance, the gap between the rich and the poor is growing. China's Gini coefficient for income, a widely used measure for inequality, stood at 0.465 in 2016, one of the world's highest levels of income inequality. "China is economically a neoliberal country. It's getting so unequal. If it doesn't solve this absurdity, it will pay a big price one day," said Ban Lui, a lawyer who works for the poor.

However, it seems hard to reverse the reality. This means that the rich are getting richer and the poor are getting poorer. This is why Chinese authorities cannot smile on the inside despite the increasing number of multi-millionaires.

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