Beijing is city of choice for growing legion of ultra-rich

 

BEIJING HAS the largest number of super-wealthy people in China, with 143,000 (yuan) multimillionaires and 8,800 billionaires in the capital, compared to 116,000 multimillionaires and 7,000 billionaires in Shanghai, China’s financial hub.

It’s getting more expensive to be nouveau riche in China these days, as price increases for the frills of a newly wealthy existence – such as cigars, high-end cognac and an MBA education – contributed to a rise in the luxury cost of living, according to an annual wealth report.

Time was when Beijing’s Marxist-Leninists would argue about how to bring about global revolution by the proleteriat, but these days, it seems there are many more plutocrats in China than tub-thumpers calling for an end to the exploitation of the masses.

“The capital required to join the Chinese upper class is increasing every year, due to the price increases on luxury goods and their limited supply,” Rupert Hoogewerf, founder and chief researcher for the Hurun Report, which produces an annual report on the wealthy in China, told local media.

“During the past several years, the complexion of the rich in China has changed in many aspects . . . many of them say they want to be a sort of upper class, rather than only being rich,” he said.

Considering that hundreds of millions of Chinese still subsist on less than €1 per day, the rich list figures do make for sobering reading.

China now has 825,000 individuals worth more than €1 million, and 51,000 worth over €10 million.

The newly wealthy like to spend their money on art, from antique jade sculptures to cutting-edge contemporary installations, and are happy spending as much as 50,000 yuan (€5,100) for a year of piano classes.

They also buy the Mercedes cars and Rolls-Royces that have made China an increasingly important destination for the luxury goods makers of the world, who are watching sales slip in more developed markets.

China’s luxury living index, which tracks the prices of 59 luxury consumer goods and services, including property, cars, jewellery and watches, increased 4.6 per cent in the year to the end of May.

This is a slowdown from last year’s 12.6 per cent, but is still 6.3 percentage points higher than the increase in the consumer price index, which measures price levels for average citizens.

High-rollers in Beijing need to spend at least 87 million yuan (€8.9 million) on property, cars and other luxury goods in order to be regarded as one of the city’s “new aristocrats”, or upper class, the report said.

The super-rich typically owned three houses, including a villa, a luxury apartment in the downtown area for work purposes, and a Siheyuan courtyard house, probably in the exclusive Houhai area of town.

“Luxury property has been the key driver for the improvement in lifestyle of China’s elite,” Mr Hoogewerf said.