China Minting Many Many Millionaires in Global Wealth Surge

[Anonymous]

China Minting Many Many  Millionaires in Global Wealth Surge
By Dexter Roberts

Driven by rapid GDP growth in China and India, Asia is expected to surpass North America and Europe as the leading source of global wealth in 2018. That year, the global pot of gold will total a bit less than $200 trillion, with the proportion from Asia projected to reach $61 trillion, slightly more than North America, with $59.1 trillion. “The Asia-Pacific region and its new wealth will account for about half of the total growth,” the report predicts.

Most new wealth last year was created as stock markets worldwide rebounded. Wealth in equities in North America increased 29.1 percent and 48 percent in Asia. Growth of private wealth in China, up nearly 50 percent, had little to do with equities, as stock markets on the mainland sagged. Instead, money was made in the risky shadow-banking sector, including through such vehicles as trusts, the value of which surged 81.5 percent, the report notes.

Even as China mints new millionaires, the gap between rich and poor keeps growing and has now become one of the world’s highest. China’s Gini coefficient—a measure of inequality—has increased from 0.3 in 1980 to 0.55 in 2010 (a zero would represent perfect equality, and a score of one would mean all income is concentrated in the hands of a single individual), according to a survey, released in April, by the University of Michigan and a group of Chinese universities. A score over 0.4 can cause socially instability, the United Nations has warned.

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June 12, 2014 at 11:20 AM