HONG KONG -- The wealth of China's ultrarich jumped 41% from April 2019 to the end of July this year, gaining from the rally in asset prices after the trough in March brought on by the coronavirus pandemic, helping the country's richest citizens to collectively break the $1.5 trillion mark and boost global billionaire wealth to a record high.
The world's second-largest economy, the first major economy to recover from the pandemic, boasted a record 415 billionaires who controlled a combined wealth of $1.7 trillion, according to a new report by UBS and PwC. In April last year, China had 389 billionaires with a combined net worth of $1.2 trillion.
Chinese billionaires' wealth creation outpaced the rest of the world thanks to the country's ability to control the virus by March, which lifted economic activity and powered wealth creation in the health, technology, materials and entertainment sectors.
A flurry of initial public offerings also propelled about two dozen company founders into the billionaire club in the first half of the year, according to data compiled by Bloomberg.
Chinese wealth creation is "linked very much to innovation and technology," Amy Lo, co-head of wealth management for Asia-Pacific at UBS, said at a news conference on Wednesday. "That is why we are seeing higher growth than the rest of the world."
UBS expects wealth creation momentum in China to continue with a recovery in cyclical sectors and earnings across the economy.
The country's billionaires have so far shrugged off mounting tensions between Beijing and Washington, and are benefiting from the economic recovery.
China's economy likely expanded 5.2% in the July-September quarter as a policy-led recovery continues, a survey by Nikkei and Nikkei Quick News found. It also is set to be the only country in the world to reach pre-crisis economic levels by the end of 2020, according to asset manager DWS.
The combined wealth of Chinese billionaires has climbed ninefold over the past decade, while that of the richest in the U.S. doubled during the period, the report said.
Billionaire wealth in China and the Asia-Pacific region also proved far more resilient in February and March when the virus shut down swathes of the global economy and sent investors scurrying to safety, it said.
The rising fortunes of the wealthy in China and Asia-Pacific amid the pandemic is in stark contrast to the millions of people being pushed into poverty as lockdown measures, the collapse of tourism and weak demand for the region's exports decimate livelihoods.
The World Bank estimates that 38 million people across East Asia and the Pacific have slipped below the poverty-line wage of $5.50 a day.
Global billionaire wealth declined 6.6% in early 2020, with the total number of ultrarich dropping by 43 to 2,058, according to the report.
In China, billionaire wealth climbed by a fifth during the period, and in Asia-Pacific, which is home to the highest number of billionaires in the world, wealth declined 2.1% during the period. Billionaires in the mainland hold half of the wealth in Asia-Pacific and 17% of the global wealth, up from 14.8% last year.
Technology entrepreneurs in China, including Alibaba Group Holding founder Jack Ma and Pony Ma of Tencent Holdings, made up most of China's billionaires, followed by executives in industrials, retail, materials and the health sector, the report showed.
The health care sector was behind the most number of new entrants in the country, with founders of the companies riding a surge in demand for drugs and medical devices.
It singled out Zhong Huijuan, the founder of Hansoh Pharmaceutical, which listed in Hong Kong last year. The listing propelled Zhong, a former chemistry teacher, to the position of the world's wealthiest health care billionaire.
The UBS-PwC report, which covered more than 2,000 billionaires who control 98% of the world's total wealth, found that global billionaires' wealth grew by more than a quarter from April last year to reach a record $10.2 trillion in July.
Due to the pandemic, the study set a cutoff date of July 31 rather than the usual April 30 deadline.