China adds 101 billionaires in 2016

China has a growing population of billionaires from technology enterprises, but the majority of those who reached the wealth milestone are from traditional sectors, such as industrials, according to the recently released UBS/PwC Billionaire Report.

During the year 2016, 101 new billionaires emerged in China, with only one of them gaining their fortune from family legacy. The average age of billionaires is 55 (versus 66 in Hong Kong).

Aiming to break a Chinese curse — “family fortunes do not last more than three generations”, China’s wealthy families have become more willing to seek professional advice in asset allocation and risk management, said Amy Lo, head of wealth management at UBS. Their investment appetite is also shifting from high investment returns to developing a portfolio with a broader geographic and asset class mix, she added.

In addition, “a number of rich second generation Chinese have been educated abroad so they are generally more open to professional management of the family fortune”, she said.

The bank has also received inquiries from Chinese ultra high net worth about investments related to philanthropic causes and social impact. “Chinese billionaires have an increasing interest in contributing and investing in the community where they come from. They are also looking at replicating successful projects from overseas in China,” Lo added.

However, Chinese billionaires tend to take their companies public. Their personal assets are closely tied with that of their companies assets and the share price performance therefore adds volatility to the family wealth.

Last year, the aggregated wealth of 318 Chinese billionaires accounted for $804bn, an amount that was up 36% from 2015, the report said. In terms of numbers, the net increase of billionaires was 67 last year.

Average wealth of China’s billionaires rose to $2.5bn, compared to $4bn in Hong Kong and $2.8bn in Singapore.

The growth in the number of China’s billionaires has driven up the number of Asia’s billionaires, which in 2016 outpaced the US for the first time, thanks to the rise in Asia’s real-estate prices, the report said.

Number of billionaires

Source: UBS/PWC