The booming world economy has led to a rapid increase in wealth in the past year. The surge in the number of billionaires in China has made it an Eldorado for private banks – a business not without risk though.

The sheer numbers are staggering: total assets of all billionaires of this world increased by almost a fifth to $8.9 trillion over the past year, according to the UBS/PwC billionaires report published on Friday. A record, of course.

Some of main aspects of this explosion of wealth in short:

  • The number of Chinese billionaires has risen to 373 in 2017 from 318 in 2016. Their assets increased by 39 percent to $1.12 trillion. The growth rate in the whole of Apac was 32 percent.
  • China created two billionaires each week, while Asia as a whole made three new billionaires per week. But as business remains risky in the region, China also lost one billionaire per week (106 new billionaires vs. 51 ex-billionaires).
  • North and Latin America lagged the world’s growth rates, with an increase in assets of 12 percent – reaching a total of $3.6 trillion.
  • Thanks to a strong currency development, Western Europe had strong wealth growth over the past year. Assets increased 19 percent, while the number of billionaires only rose 4 percent to 414.
  • The U.S. and China are likely to see slower economic growth in the coming period as Donald Trump’s trade war bites.

New Wave of Entrepreneurship

«Over the last decade, Chinese billionaires have created some of the world’s largest and most successful companies, raised living standards. But this is just the beginning,» said Josef Stadler, head of ultra-high net worth at UBS wealth management.

«We are experiencing a new wave of entrepreneurship worldwide, with billionaires at the vanguard of innovation. They are creating jobs and prosperity, but their impact goes beyond economics.»

Self-Made Billionaires

The Chinese century has begun and the following facts are proof that the country’s entrepreneurs are quickly catching up with the Silicon Valley billionaires:

  • In 2006, the Chinese had 16 billionaires, with the command economy still entrenched. Today, three decades after the government first allowed the emergence of private enterprise, there are 373 billionaires, one in five from a global perspective.
  • Of all Chinese billionaires, 97 percent are self-made. Last year, 89 Chinese businessmen made their first billion dollars, three times more than in the U.S. and EMEA.
  • Asian billionaires on the whole and those based in Shenzhen in particular are a major challenge to the traditional U.S. dominance in tech matters. They attracted the same amount of risk capital for startups in 2017 as their U.S. brethren.

A Risky Banking Business

«Asia's billionaires are young and relentless. They are constantly transforming their companies, developing new business models and shifting rapidly into new sectors,» said Ravi Raju, head of Asia Pacific ultra-high net worth at UBS wealth management. «This cohort is overwhelmingly self-made and determined to capitalize on one of history’s greatest moments for new enterprise.»

The rapid expansion of wealth in China isn’t without risk for those who want to have a share of the cake. Far from being a Wild West with little or no controls, China’s government is looking closely at how business is evolving and what the successful entrepreneurs are doing with their money.

UBS Banker Interviewed

Last week, a UBS relationship manager, normally based in Singapore, was stopped at Beijing airport and interviewed by authorities. The reason behind the action remain elusive. The Swiss bank briefly banned its staff from travelling to the country – the situation since has returned to normal.