China accounts for half of the billionaires' wealth in Asia-Pacific and 17% globally, according to a new study. Healthcare, materials, entertainment and media are the top sectors driving billionaire wealth growth in the country.
Despite the impact of the pandemic and volatile markets, China’s billionaire wealth grew at the fastest pace among peers in Asia, the UBS and PwC Billionaires Report 2020 reveals. As of the end of July 2020, the country had 415 Chinese billionaires with a combined wealth of US$1.7 trillion, a staggering 71% rise from 2018. The report also notes that 98% of these billionaires are self-made, the highest in APAC.
In April to July, when the pandemic in the country started to be under control and the market began to recover, Chinese billionaires' wealth grew by 41%.
"China billionaires now hold 50% of APAC billionaires' wealth and 17% of the global billionaires’ wealth," says Amy Lo, co-head of Wealth Management Asia Pacific, UBS Global Wealth Management and head and chief executive of UBS Hong Kong.
Indeed, the private banking industry, which used to be a niche market at the top of a wealth management pyramid in China, has entered a new era. Chinese banks are quickly building up their capability and market share in this space.
Late last month, Agricultural Bank of China (ABC) has launched its first private banking exclusive service in Shanghai, showing its ambition in this fast-growing market. According to the bank's senior management, ABC now has 136,000 private banking clients with total assets under management (AUM) of 1.6 trillion yuan (US$237.3 billion), placing it at the top among China's Big Four banks in this space for the past two years.
Chinese banks’ private banking businesses seems not to have been impacted too much by the pandemic. In the first half of this year, the country's 16 listed banks have reported a total AUM of 13.96 trillion yuan, recording an increase of 1.51 trillion yuan from the end of last year and a year-on-year growth of 12.16%.
Healthcare, materials, and entertainment and media are the top three sectors driving this strong growth, says Antoinette Hoon, private banking advisory services partner at PwC Hong Kong.
Meanwhile, the private banking market in Hong Kong is relatively flat. “In Hong Kong, the number of billionaires dipped slightly to 65 individuals," says Hoon, noting that the combined wealth of the city's billionaires slightly increased from US$320 billion last year to US$356 billion as of July this year. Industrials, healthcare and technology were the three main sectors contributing to the growth.