Is China producing fewer new millionaires? Yes, according to a recent study from the Hurun Research Institute. The growth rate of new millionaires in China has slowed to 3 percent last year, down from 6.3 percent of the prior year.
This drop is the largest in five years, which some attribute to a slowing Chinese economy that is growing at its weakest rate in more than twenty years.
The Hurun study defined millionaires as individuals with a personal wealth of 10 million RMB, or $1.6 million. China has 1.05 million millionaires, with 64,500 of them who have personal wealth of at least 100 million RMB or $16 million, according to the study. The growth of these “super-rich” Chinese, which was up only 2 percent, was also the slowest in five years.
Beijing had the highest number of millionaires at 184,000, adding 5,000 millionaires. Tianjin had the fastest increase in all the cities, up 11 percent from the prior year, while its “super-rich” category grew by 12 percent.
According to Hurun, “China’s millionaires fall into four categories: private business owners, stock market gurus, property speculators and high-salaried executives, in which the number of stock market guru dropped by 5% from the previous year, and the number of high-salaried executives grew by 5% from the previous year. The Chinese super-rich fall into three categories: private business owners, stock market gurus, and property speculators.”
This is just another piece of bad news for luxury brands who are already squeezed by an overall tougher climate in China from fierce competition and government actions. However, China remains one of the most promising markets despite the slowdown. Many experts did not expect China’s past rate of growth to be sustainable.
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