China records second highest population of millionaires

China records second highest population of millionaires
Beijing, China

China had four million millionaire households in 2014, the second-highest in the world after the United States, as the country’s stock market boom improved private wealth, an independent survey announced Tuesday.

One million new millionaires were created in the country last year, the highest increase among all countries, US-based research firm Boston Consulting Group (BCG) stated in a report.

The United States had seven million millionaire households last year, the largest in the world. Japan took third place with one million, according to the report.

Growth in private wealth in China was fueled mainly by investments in local equities, it mentioned.

The benchmark Shanghai Composite Index finished 2014 as the best performer in Asia after rising by more than 50 percent.

“Strong market performance across the entire (Asia-Pacific excluding Japan) region thanks to solid domestic demand significantly increased the value of existing assets compared with the increase stemming from newly created wealth,” the report said.

The increase in the value of existing assets accounted for 76 percent of the region’s growth in private wealth, it added.

China had 1,037 households with more than USD 100 million (Ksh 9.7 billion) in net worth, around one fifth of the United States’ 5,201 but the second-largest in the world, the report said.

In an April report, Forbes disclosed that mainland China was estimated to have a record 400 billionaires and billionaire families thanks to “a rally in stock prices”.

An income gap has become worrying in the world’s most populous country, where the official Gini coefficient stood at 0.469 last year.

The figure is an accepted used measure of income inequality, with 0 representing perfect equality and 1 total inequality. Some academics view 0.40 as a warning signal.

Analysts say that corruption connected with government control of the economy, the state monopoly of some industries and a lack of social security for migrant workers are among reasons for the country’s income imbalance, according to a report earlier this year by the People’s Daily, the ruling Communist Party mouthpiece.


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