Global Billionaire Wealth Has 'Greatest-Ever Increase,' With China at Forefront

Globally, billionaire wealth enjoyed its greatest-ever increase in 2017, rising 19% to $8.9 trillion among 2,158 individuals.

These findings were published in UBS and PwC’s annual Billionaires Insight Report, which draws on UBS and PWC’s extensive client network and access to data, and aims to promote a deeper understanding of the billionaire population globally.

The 2017 ncrease was substantially higher than the average 9% for the past five years, according to this year’s report.

According to the study, 332 new billionaires accounted for more than a third (38%) of the increase. Notably, 199 of them were self-made entrepreneurs, 89 of whom were from China.

“China’s billionaire entrepreneurs are leading their country’s economic transformation, and by extension that of the rest of Asia,” the report states. “Over little more than 10 years, they have created some of the world’s largest companies, raised living standards and made fortunes at an unprecedented pace.”

Twelve years ago, China was home to only 16 billionaires. Today, that number has grown to 373 — nearly one in five of the global total. The year 2017 itself was exceptional, reflected in China minting two new billionaires a week.

The report attributes China’s billionaire growth in part to being a “mobile-first” country with a population of 1.4 billion.

“China’s entrepreneurs are discovering new markets among the country’s 770 million internet users, creating businesses and changing society at a pace never seen before,” the report states.

After several years in the making, in 2017 the growth of China’s e-commerce and technology businesses exploded, according to the report.

In this one year alone, Chinese billionaires’ wealth increased by 39% to $1.12 trillion, equal to the market capitalization of the entire Swiss Market Index.

According to the report, outstanding economic and market conditions were ideal for wealth creation. Real GDP grew by 6.9% and profits in the offshore MSCI China Index surged by 23%. The MSCI China Index rose 54.1% and the MSCI China A Onshore Index by 20.5%.

There were also 631 IPOs in Greater China, raising $52.1 billion, compared with 378 that raised $47.3 billion in 2016.

The growth seen this year may reflect a lasting trend. According to the report, China’s young entrepreneurs are set to swell the ranks of the world’s billionaires for “years to come.”

“Supported by rapid urbanization and productivity growth, they are leveraging technology to revolutionize the country’s services sector, as well as growing businesses in areas such as AI and health care,” the report states.

However, the report also notes that the pace of growth will fluctuate, depending on the economic cycle, financial liquidity and whether the U.S.-China trade war escalates.

Meanwhile, the billionaire momentum has slowed in the U.S., though the country still has the biggest concentration of billionaire wealth.

U.S. billionaires’ wealth grew 12% in 2017 to $ 3.1 trillion, far slower than the global average.

The number of new U.S. billionaires is far lower than five years ago. The net number of billionaires grew by just 22 in 2017, down from 87 in 2012.

In financial services, for example, there were nine new billionaires, compared with 20 in 2012.

According to the report, this drop “may be due to the pressures on hedge funds, where both fees and performance have fallen.”

But, the report also points out that there has been a rise of “stealth wealth.”

“A tendency to keep businesses private for longer before listing on public markets means that wealth creation is underreported in the U.S., and even Europe,” according to the report.