Google “China’s millionaires” and you will find an array of articles that focuses on two issues related to this population. One, entitled “China Now Has More Millionaires Than Any Country but the US,” states that the millionaire population in China rose by an astonishing 82% between 2012 and 2013. There are approximately 2.4 million millionaire households in China today. Millionaire in this context is defined in terms of liquid wealth, “not real estate, collectibles or luxury items.” Another article, “Capital Flight: Nearly Half China’s Millionaires Plan to Emigrate,” has many implications for the American economy. One of the most desirable destinations among wealthy Chinese is the US. The major reasons given for this choice include better opportunities for their children, economic security and a more desirable climate.
But could I add a fourth reason? According to Automotive News, a Mercedes-Benz GL63 is priced at $118,560 here in the US. But in China it is a whopping $319,190 in equivalent American dollars! A Range Rover that sells here for $84,225 costs nearly $241,480 in China.
How do American millionaires differ from those in China? The large majority of millionaires here are of the balance sheet variety. In other words, they built wealth slowly, live below their means, etc. But in China there is an enormous population of income statement affluent. Most Chinese millionaires became wealthy nearly overnight. They did so by generating extraordinarily high incomes. The more rapidly people achieve high incomes and wealth the higher their propensity is to spend.
Overall Chinese millionaire immigrants have the potential for a net positive effect on our economy. Their consumption of multiple luxury homes, prestige makes of motor vehicles, expensive private schools, and other status products and services could be phenomenal.
Phenomenal, that is, if in fact our government allows those who want to enter our country to do so. It is my hope that those millionaires who are allowed to immigrate only generated their fortunes in what we would consider a moral and reputable way, not from graft, corruption, slave labor, etc.