The glitz and glamour of summer box-office hit “Crazy Rich Asians” sought to shine a light on an exclusive subgroup of wealthy elite. But, instead, it pointed to a fast-expanding proportion of Asian society.
That’s according to a new report from data firm Wealth-X, which found that Asia is now creating more ultra wealthy individuals — those worth $30 million or more — and accumulating wealth at a faster pace than any other region in the world.
Last year, Asia’s ultra wealthy population grew by 18.5 percent and their total wealth shot up by 26.7 percent, twice the rate seen in the U.S., the World Ultra Wealth Report 2018 found. The combined riches of Asia’s ultra wealthy now total a staggering $8.365 trillion, based on analysis of Wealth-X’s database of wealthy individuals.
To be sure, the U.S. remains the world’s leading location for the uber rich, staking claim to 35 percent of the world’s ultra wealthy population, whose combined wealth totals $10,998 billion. However, Asia is quickly closing in. In the past decade, Asia’s proportion of global wealthy rose from 18 percent to 27 percent, positioning it just behind the world’s second wealthiest region, Europe (28 percent).
In the coming years, that gap is set to shrink further, according to the report. It predicts that Asia-Pacific’s ultra wealthy population will increase at a compound rate of 8.3 percent over the next five years, while overall wealth is on track to grow by a slightly faster 8.6 percent. The U.S., meanwhile, is expected to post below-average gains.
That will bring Asia closer to parity with the world’s leading wealth regions, Vincent White, managing director of the Wealth-X Institute told CNBC Make It.
“Asia recorded the highest growth in UHNW (ultra high net worth) population accompanied by a disproportionate rise in combined wealth of over one quarter,” said White. “In the forecast through to 2022 we expect to see a continuation of this growth, closing the gap with the Americas and EMEA.”
Where is the wealth coming from?
Improved economics and soaring stock markets last year proved a boon for the wealthy throughout the world, with the overall pace of wealth growth more than tripling from 3.5 percent in 2016 to 12.9 percent in 2017.
However, Asia’s dramatic uptick was led by a new wave of ultra wealthy entrepreneurs, who are capitalizing on growing opportunities within the region, particularly in the financial, manufacturing and tech industries.
Primary industries of the world’s ultra wealthy globally:
The vast majority of that wealth accumulation came from mainland China, which is home to 26 of the world’s 30 fastest-growing ultra high net worth cities, as well as India and Hong Kong, the report found. All three places registered an increase in wealth of 30 percent in 2017.
But a significant proportion also came elsewhere, such as Vietnam, Indonesia and Bangladesh. Indeed, over the past five years, Bangladesh has registered the fastest-growing ultra wealthy population of any country in the world.
Wealth accumulation is not limited to the “crazy rich,” however. Over the coming years, as many Asian countries continue to grow at a faster pace than more developed economies, wealth growth is expected to speed up across all regional demographics, particularly the middle class.
Currently, Asia’s middle class totals around 525 million people, or 28 percent of the world’s middle class population, according to DBS bank’s “Imagining Asia 2020” report. Over the next decade that group is forecast to expand by more than three times to 1.74 billion.
“That would make up about half of the world’s middle class population by 2020,” the report notes.