Chinese billionaires have 12% of the world’s wealth and counting

Chinese billionaires have 12% of the world’s wealth and counting

A new report by Forbes shows that, with the exception of the USA, China now has more billionaires than any other country on the planet.

Mainland China is now home to one hundred and fifteen billionaires. Hong Kong has thirty five and Taiwan twenty five.

Furthermore, almost all the billionaires in Thailand, Malaysia, Philippines, Singapore and Indonesia are of Chinese decent.

The report found that the two hundred and thirteen billionaires of Chinese origin have a combined wealth of US$567 billion. This means that Chinese billionaires now account for over twelve percent of the world’s total wealth.

China’s wealth has been largely attributed to its growth in manufacturing, financial services and foreign real estate investment.

However, unlike western billionaires such as software giant Bill Gates who tend to focus on a specific industry, those of Chinese decent tend to be involved in a number of different businesses.

The report found that in Hong Kong the majority made their fortunes in real estate and financial services.  Whereas in Taiwan the electronics industry dominated, with billionaires such as Cher Wang and Wenchi Chen who made their fortunes from the HTC phone brand.

“A circle of wealthy Chinese people is taking shape. Wherever the billionaires are residing, their businesses are getting more and more related with the opening up and fast growing market on China’s mainland,” commented Zhou Jiangong, chief editor of Forbes China.

“The development of residential projects, hotels, commercial properties and the quick urbanisation on China’s mainland has provided an unprecedented feast of fortune,” he added.

Hong Kong is home to three of the richest Chinese on the Forbes list; Li Kai-shing; the Kwok family headed by brothers Thomas and Raymond; and Lee Shau Kee. All three made their fortunes in the real estate business in mainland China.

Li Kai-shing is the chairman of Hutchinson Whampoa and Cheung Kong Holdings. He maintained his position as China’s richest man, growing his fortune by US$6 billion during 2010 to a total of US$26 billion.

Also on the list is Robin Li, the richest billionaire living on the Chinese mainland.  His fortune of US$9.4 billion was made from China’s answer to Google, Baidu.

The USA still counts the largest number billionaires globally, with four hundred and thirteen. However, for the first time in over a decade Asia has more billionaires on the list than Europe, with three hundred and twenty two compared to Europe’s three hundred.

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2011 Wealth Report shows Asia catching the West

2011 Wealth Report shows Asia catching the West

`The 2011 edition of The Wealth Report by Knight Frank released on April 6th has revealed some interesting facts about high net worth individuals (HNWI) worldwide.

The report, produced in conjunction with Citi Private Bank, shows that globally HNWIs invest thirty five per cent of their wealth in prime real estate. This is second only to their investment in their own businesses.

For HNWIs in Asia, quality of education and taxes were cited as the most important factors when choosing a location to buy property. In fact, twenty nine per cent of Asia’s HNWI second home buyers said their children’s education was the overriding factor when picking a location to buy property overseas.

The Wealth Report also details the locations where the largest property price increases have taken place in the past year.

Six out of ten of the largest property price rises were in Asia. The biggest increase in Asia came in Shanghai, with a twenty one per cent rise, whilst London and New York saw increases of ten and thirteen per cent respectively.

The top ten reads as follows: (1) Shanghai, (2) Mumbai, (3) Singapore, (4) Helsinki, (5) Bangalore, (6) Paris, (7) Hong Kong, (8) New York, (9) Manila and (10) Guernsey.

But for now, Monaco remains the most expensive residential location in the world, followed by London.

However, Asian countries are catching up fast; figures from The Wealth Report Attitudes Survey, which surveys the opinions of five thousand HNWI clients from Citi Private Bank, show that Mumbai, in India has increased in importance by one hundred and eighteen per cent, Shanghai in China by ninety one per cent and Sao Paolo in Brazil by sixty six per cent.

Property prices in a number of cities also fell sharply, including Dublin by minus twenty five per cent and Dubai by minus ten per cent.

The report also shows that the largest increase in wealth occurred in the Asia Pacific region, with a thirty five per cent rise year on year.

“The collective worth of the global HNWI community increased by 22% last year, according to data in the 2011 Wealth Report, so it is not surprising that many of the world’s luxury property markets benefitted. The biggest increase in wealth was in Asia Pacific (+35%) and that is where we also recorded the biggest increases in property prices,” commented Andrew Shirley, editor of The Wealth Report.

“However, it is not just wealth creation that is ensuring that the international prime property market contains players from more countries than ever before. As we have seen recently in North Africa and the Middle East, a number of major geopolitical shifts are now playing out around the world. These all serve to enhance the desirability of true global centres, like London and New York,” he added.

The report concluded that sixty four per cent of HNWIs will increase their spending on overseas property, art, fine wines, private jets and yachts over the next five years.

China biggest spender on luxury property in London

China biggest spender on luxury property in London

London, United Kingdom: According to new research by Knight Frank, the Chinese are now the biggest buyers of luxury property in London, having overtaken investors from Russia.

Property investors from mainland China spent an average of £6.5 million (US$10.4 million) per luxury property between February 2010 and February 2011, beating the average of more than sixty other nationalities who bought property in London over the same time period.

The figures show that investors from Hong Kong and Malaysia are the next biggest spenders, paying an average of £6 million (US$9.5 million) per property.

Russian buyers dropped to fourth place, spending on average £5.4 million (US$8.6 million).

“Until two years ago, the most affluent buyers in the central London market were Russian, on average they outspent every other nationality by far,” said Liam Bailey, head of Knight Frank Residential Research.

“But the average purchase price paid by Russian buyers has been dragged down by the growing pool of millionaires joining the billionaire buyers,” he concluded.

Although they are no longer the biggest spenders per property, Russian’s are still the most prolific buyers of property in London, buying up six percent of all £2 million (US$3.2 million) plus valued properties over the past year, but agents say the Chinese are the ones to watch.

Although Chinese buyers actually bought less high-end property in London than other nationalities, real estate agents are reporting high levels of interest from Chinese buyers this year, especially in trophy homes.

Local agents say that wealthy clients from China are looking for property between £15 million (US$24 million) and £25 million (US$40 million) in up-market areas such as Mayfair and St. James.

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China top for luxury by 2020

On February 23, 2011, in International, Latest news, by OVG
China top for luxury by 2020

China top for luxury by 2020

According to a report by investment research group CLSA Asia Pacific Markets, China is set to become the world’s largest buyer of luxury goods by 2020.

Already equipped with bigger pay cheques and a strong desire to show off their new found wealth, the Chinese are buying up designer fashions such as handbags, watches and clothing.  Brands such as Louis Vuitton and Hermes have seen large increases in sales from their retail outlets in China.

According to the report, China will be spending roughly US$101 billion annually on luxury goods by the end of 2020.

The CLSA research group estimates that the worldwide luxury goods market will be worth in the region of US$ 522 billion by 2020.  This means that China’s US$101 billion share of the market will be roughly twenty percent of the global total.

China has continued to benefit from strong economic growth, producing large numbers of millionaires.  The number of Chinese who have assets of one billion yuan (US$152 million) or more reached 1,363 last year; a number that has been increasing at an annual rate of between fifty and fifty-eight percent since 2000.

In China it is customary to show off your wealth and Chinese consumers are happy to pay high prices to catch other people’s attention.

The biggest buyers of luxury goods in China are men, buying up items such as designer watches, leather goods and other extravagant gifts for colleagues and business partners.

In fact, it is very common for businessmen to pay 30,000 yuan (US$ 4,575) for a bottle of wine and last October three bottles of Chateau Lafite Rothschild 1869 were sold at a Sotheby’s auction in Hong Kong for US$230,000 each.

However, it’s not just retailers in China who are benefitting from this Chinese spending spree; the Chinese are heading overseas where luxury products are cheaper.  One UK newspaper, The Guardian, reported that many Chinese UK residents celebrated Chinese New Year with luxury shopping sprees.

One such person commented; “Who needs dumplings and fireworks in Beijing when you can have Burberry and Chanel in London?”

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China still buying up Europe

On January 27, 2011, in International, Latest news, by OVG
China still buying up Europe

China still buying up Europe

As the British Pound and Euro remain weak, and with European property prices at levels well below their 2007 highs, Chinese investors are continuing to buy up property in some of the most sought after locations in Europe.

China’s rich are buying up a diverse range of prime, luxury real estate which ranges from historic castles in Germany to Chateaus in France and villas on the Spanish Costas.

London, however, remains the most desirable location for Chinese buyers. In fact, investors from mainland China and Hong Kong now account for ten percent of all new property purchases in central London.

Chinese investors are attracted to London for several reasons; one being, they can buy property and live in the UK for up to ninety days per year without paying UK taxes on their worldwide income.

Real estate agents and developers in London have been taking advantage of the surge in the number of Chinese investors by holding exhibitions and seminars in China and hiring Mandarin speaking sales consultants and translators.

Several property developers in the UK capital are even seeking the advice of Feng Shui experts and some London apartment blocks are even without a fourth floor, as the number four is considered unlucky in China.

Currently the Chinese government limits the transfer of funds out of China to a maximum of £31,700 (US$50,000) per person, per annum. However, many mainland Chinese citizens get around the restrictions by using black-market money changers in southern China.

Additionally, as many of London’s Chinese buyers are members of China’s super-rich, they usually have companies in Hong Kong along with both corporate and personal bank accounts. As the financial restrictions do not apply in Hong Kong, they are free to transfer funds overseas in order to buy foreign property.

The surprising thing for many real estate agents in London has not been the quantity of real estate bought by the Chinese, but the speed at which the decision to buy has been made and the transaction then completed.

Buyers from the UK usually take weeks to decide, whereas buyers from mainland China take just one day on average. People from Hong Kong are even quicker, with most decisions to buy being made around an hour after viewing the property.

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Donald Trump to build luxury tower in Mumbai

Donald Trump to build luxury tower in Mumbai

Trump Organisation, the real estate and entertainment company, privately owned by businessman Donald Trump, has announced plans to enter the Indian property market by building the Trump Tower Mumbai.

In what will be Donald Trump’s first real estate venture in India, Trump Organisation will work alongside Indian property developers Rohan Lifescapes to construct the luxury residential project in Mumbai.

Rohan Lifescapes will be responsible for building the Trump Tower, which will be officially launched by Donald Trump himself when he arrives in India.

The Trump Tower Mumbai will be a 3,000,000 square foot complex with 45 spacious apartments. The building will feature a luxury spa, a gymnasium, a mini-theatre and residents will benefit from a state-of-the-art security system.

Donald Trump Junior, executive vice president of Trump Organisation , commented, “The market place [in India] is beginning to understand and appreciate luxury, so there is a great opening for us there, as well as in resorts”.

The property market in Mumbai was badly affected by the global economic downturn in 2008 and saw new home sales fall by twenty five percent.

However, during the last ten years, the number of wealthy Indians has grown rapidly.  In fact, the Merrill Lynch-Capgemini World Wealth Report showed that the number of millionaires in India had increased from 84,000 in 2009 to 126,700 in 2010.

As the wealth of the Indian population has continued to grow, luxury property developments in India have seen increasing demand.

A recent, if extreme, example of this was the construction of Antilla; a twenty seven-storey house in Altamount Road, south Mumbai.

Owned by India’s richest man, Mukesh Ambani, and named after a mythical island in the Atlantic Ocean, it is estimated that Antilla cost Ambani around £44 million (US$70.3 million) to build.

Unsurprisingly, according to recent reports, the new Trump Tower will be in south Mumbai; the same location as Antilla.

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Li Ka-Shing Hong Kong's richest man

Li Ka-Shing Hong Kong's richest man

According to the latest Hong Kong rich list published by Forbes Asia, forty of Hong Kong’s wealthiest people are US dollar billionaires.

In fact, the top forty super rich in Hong Kong are reported to have a combined net worth of US$167 billion.

Although this total has increased by US$28 billion since 2009, it still remains below the 2008 figure of US$178 billion.

Senior editor at Forbes, Russell Flannery, commented; “There is no doubt that most of Hong Kong’s wealthiest are riding the China wave. Much has changed in China in the past few decades, but Hong Kong’s role as an important conduit between foreign businesses and mainland [China’s] economy hasn’t, and that’s very apparent in this year’s Hong Kong list.”

Even though Hong Kong has a total population of just over seven million, whilst mainland China can count well over one billion, the top forty richest in Hong Kong are worth US$26 billion more than their counterparts in mainland China.

The wealthiest man in Hong Kong is eighty two year old Li Ka-Shing, whose total wealth is estimated at US$24 billion. Li Ka-Shing has held the number one spot in Forbes’s Asia rich list since 2008, when the list was first published.

In second place are the Kwok family, with a total fortune of US$20 billion. The husband and wife team saw their net worth rise sharply in 2010 – mainly due to the success of their real estate development company, Sun Hung Kai Properties.

Lee Shau Kee, who ranked second wealthiest in Hong Kong last year, slipped to third position with a net worth of US$19.5 billion.

Looking at the Forbes Asia rich list for Hong Kong, it is apparent that the majority of Hong Kong’s business tycoons have made their wealth from real estate. During 2010, property developers in Hong Kong suffered from tax increases on property transactions, increases in office rents helped those who own commercial properties.

New comers to the 2011 Forbes Asia rich in Hong Kong list were; William E. Connor II at number twenty two with US$2 billion, Choy Kam Lok with US$1.73 billion and Albert Yeung with US$1.3 billion in assets.

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Asia has seen strong sales this festive season

Asia has seen strong sales this festive season

As European and US economies continue to suffer from the economic downturn; consumers in the West have been cautious and the retail market slower than usual this Christmas.

However, global retail brands have seen strong sales in Asia in the run up to the festive season.

Singapore’s popular Orchard Road shopping area was busy with foreign tourists during the past two months. Many of these came from Southeast Asia where currencies have risen in value against the US dollar this year.

One such tourist, Don Triangga a twenty six year old Indonesian, spent over one thousand Singapore dollars (US $1,150) on a Louis Vuitton belt and Burberry shirt.

In fact, economists in Singapore have forecast a fifteen percent increase in Gross Domestic Product (GDP) for this year which, if achieved, will make Singapore Asia’s fastest growing economy in 2010.

Lee Hae-Kyung, a thirty three year old hospital administrator, said her budget for Christmas gifts this year was forty-four US dollars for each friend – five times more than her budget last year.

“It’s not like I’m making more money than before, but I just feel like spending more since people around me and the whole atmosphere seem to be far more optimistic,” she said.

Over in Hong Kong, the retail industry is also booming. In fact, according to government figures, retail sales rose by 18.3 percent to the end of October compared with the same period last year.

“The level of income growth remains very strong in China so [Chinese tourists] are likely to keep spending more,” commented Aaron Fischer, an analyst at Hong Kong based brokerage and investment group, CLSA.

Thailand has also seen retail sales improve, largely due to an improved political situation attracting more tourists along with an easing of concerns over the strong Baht.

The picture in Australia, however, is completely different.

The strength of the Australian dollar is affecting local businesses and consumers are increasingly shopping online for offshore bargains.

Recent interest rate rises have also weakened consumer confidence and many Australians have cut back their spending this year.

“Consumers are already showing signs they are watching their pennies this festive season with almost thirty three percent saying they are planning on spending less this year than last Christmas,” said Australia Retailers’ Association director Russell Zimmerman.

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Singapore laps up new Lamborghini

On December 20, 2010, in International, Latest news, by OVG
Lamborghini Aventador, LP700-4

The new Lamborghini - LP700-4

Despite the global economic downturn, the economy of Singapore shows no signs of slowing.

In fact, more than fifty orders have been received for the new, SGD$ 1.5 million, Lamborghini LP700-4; and it hasn’t even got a name yet.

The fifty orders were placed during a private preview in Singapore, which was the car’s first stop in Asia, before visiting Hong Kong, China and Japan.

Managing Director  of Lamborghini Singapore, Melvin Goh , said that combined sales for the Murcielago and Gallardo models have reached forty nine this year;  including four unregistered Reventon limited edition models. He also expects at least two more sales by the end of the year.

When questioned why Lamborghini had received such an overwhelming response Mr Goh replied; “The Lamborghini product is more trusted now and the brand’s visibility and image has improved.”

“In the last five years since the arrival of the Murcielago and Gallardo, people now understand the cars better and realise the products are good, so they are willing to book one even when it’s new and before it is here.”

One buyer explained his reasons for ordering the new model; “’The LP700 can go from zero to one hundred kilometres per hour in two point nine seconds.  How many cars can do that in less than three seconds?  You’re talking maybe about the Bugatti Veyron but that will cost at least four and a half million Singapore dollars.”

The new mid-range Lamborghini LP700-4 has a lightweight body and is powered by a new 6.5 litre V12 engine which provides a massive seven hundred horse power and six hundred and fifty Newton metres of torque.

Top speed is a staggering three hundred and fifty kilometres per hour.

The V12 engine is coupled with the new Independent Shifting Road (ISR) transmission system which allows the driver to change gears in less than fifty milliseconds.

By comparison, a Formula One car takes approximately thirty milliseconds to change gears.

Apart from the new Lamborghini’s excellent performance, the LP700-4 also has the distinctive Lamborghini style, including the famous scissor doors.

However, Lamborghini are not alone in Singapore.

As Singapore’s economy continues to go from strength to strength, all the ultra-high end sports car manufacturers have experienced growth in sales this year.

According to data by the Singapore Land Transport Authority, there were registrations of fifty-nine Ferraris, thirty-two Aston Martins and forty-seven Bentleys during 2010.

Sales this year have already overtaken those from 2009 where thirty-two Ferraris, twenty-five Aston Martins and forty-five Bentleys were sold.

The Lamborghini P700-4 will make its world premiere at the Geneva Motor Show in March 2011, when its official name will also be announced.

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Bank of China opens in London

Bank of China opens in London

The recent opening of the Bank of China in the heart of London demonstrates just how much of a stake China has in the U.K. and sends a clear signal to Chinese investors.

In fact, the Bank of China is already funding a £100 million (US$ 157 million) hotel at Queen Anne’s Chambers, near New Scotland Yard.

The Chinese bank is also financing the purchase of a £32 million (US$ 50 million) office block in the City of London.

Just last week, representatives from the Bank of China, along with solicitors from law firm DLA Piper and property agents from Jones Lang LaSalle, took part in a series of presentations to Chinese investors in Beijing and Shanghai.

Their aim was to advise Chinese nationals who are interested in property in London.

James Thomas, head of residential sales at Jones Lang LaSalle, commented; “The invited audiences were clients of the Bank of China, so a pretty select bunch. We told them what is driving the London market. DLA Piper talked through the legal issues and the Bank of China indicated how much they could borrow and remit.”

The super-rich Chinese have been buying property in London for several years, as most made their money from manufacturing outside of China and were free to move their money around.

However, current legislation means it is now possible for all Chinese nationals to own property abroad.

Individuals holding Renminbi (the official currency of China) can send approximately £30,000 (US$ 47,000) out of China each year.  Whilst as individuals, this is not nearly enough to buy property in London, family members often join funds together to enable them to buy.

The Bank of China in the UK can also grant mortgages to Chinese nationals in a very short time, making it possible for them to put together the asking price.

As a result, there are now new groups of Chinese investors buying up London property.

If Chinese fiscal policy remains the same, the numbers of Chinese buying property in London looks set to increase.

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