Call it a trans-oceanic changing of the guard.
In another 10 years, Hong Kong Special Administrative Region will overtake Singapore as the city that matters most to Asia’s wealthy, according to a new report. And in a big trans-Atlantic change, New York will displace London as the world’s premier destination for the ultra-rich.
“Despite the proliferation of economic success stories across Asia, the dominance of China is unavoidable and Hong Kong’s unofficial role as the portal between its big brother and the rest of the world will ensure the growing dominance of the city over the next decade,” the 2014 Wealth Report by UK real estate consultancy Knight Frank said.
The report, released this week, is based on a survey of the attitudes of more than 23,000 ultra-wealthy individuals, those with $30 million or more in net investable assets. These ultra high net worth individuals, or UHNWI, are worth on average $68 million each, and represent more than $1.5 trillion in combined wealth, according to the report.
The report found that the rich in China keep getting richer. Many, however, are looking for ways to give more of their money to deserving causes.
“Many UHNWI in China are definitely searching for new ways to give more back to society,” said Lawrence Wong, the alternative chief executive and head of business for private banking with Bank of China International Ltd, who is a member of Knight Frank’s global wealth panel.
As China’s wealth increases, raising the level of philanthropic activity, so does its level of luxury-goods spending, the report showed. It quoted Torsten Muller-Otvos, CEO of Rolls-Royce Motor Cars, as saying that much of the prestigious automaker’s record 2013 performance was driven by emerging markets, with sales up 11 percent in China.
Among respondents with Chinese clients, 45 percent said that their clients’ interest in French vineyards was growing, reflecting wealthy Chinese’ new-found appetite for wine.
The slowdown in the Chinese economy has prompted speculation over the challenges that the world’s second-largest economy will confront in the years ahead. China’s leadership has said its goal is to shift its economy away from dependency on exports and large-scale government investment and toward domestic consumption and the opening up of consumer credit.
The country’s political leaders need to “engender confidence in their ability to steer the nation on a course towards sustainable economic expansion”, according to the report.
Even with the hurdles facing China, its influence should not be underestimated, according to Jim O’Neil, of Goldman Sachs Group Inc. “Although growing at a rate of around 7 percent, less than during the past 30 years, China will add an extra $1 trillion to global GDP every year this decade,” O’Neil said. “It’s the equivalent of adding another Germany and Japan to the world by the end of the decade.”
Read more at China Daily.