Shenzhen city skyline.
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China's Shenzhen has recorded the fastest growth in the number of millionaires over the past decade and is poised for further inflows in the coming years, according to a recent report.
Shenzhen recorded a 140% growth in the number of millionaires, according to the report from New World Wealth and investment migration advisors Henley & Partners.
The growth is much more than in China's other leading cities, including Beijing and Shanghai, where the millionaire population rose by 90% and 84% respectively.
In 2023 alone, Shenzhen saw a 10% growth in the number of millionaires, while Beijing and Shanghai recorded a decline of around 5% in the midst of an exodus of wealthy individuals from China.
“Overall, the number of millionaires in China fell 3% in 2023, so Shenzhen significantly outperformed the entire country in 2023,” Andrew Amoils, an analyst at New World Wealth, told CNBC.
Most of this increase in the number of millionaires in Shenzhen is due to new activities and organic income growth in the city, while about 30% of the growth is due to inflows from cities such as Beijing, Shanghai and Hong Kong, according to Amoils.
Shenzhen, also known as China's Silicon Valley, is expected to continue growing “very strongly” until 2040, compared to Beijing and Shanghai, which are likely to see moderate growth, Amoils added.
This is happening against the backdrop of the stagnant Chinese economy in recent years, which has been dragged down by a controversial real estate sector.
That of Shenzhen The economy grew by 6% in 2023surpassing growth in Beijing and Shanghai.
The Chinese city of Hangzhou ranked second in millionaire growth at 125%, while the Indian city of Bengaluru and Austin in the US came in third and fourth respectively; China's Guangzhou is in fifth place, Amoils told CNBC.
The progress of Shenzhen
“What set Shenzhen apart from other Tier-1 cities over the past 30 years was its relatively light-hearted governance and welcoming attitude towards migrants,” said Erica Tay, director of macro research at Maybank.
Compared to Shanghai, which derives its economic power from state-owned enterprises, Shenzhen's business landscape is dominated by private sector entrepreneurs, she added.
In addition to being a hotspot for startups, Shenzhen is also the… base city for global technology giants such as Tencent, Huawei and BYD.
“Pro-business, pro-innovation regulations have produced wave after wave of self-made fortunes [in Shenzhen],” Tay said.
Shenzhen's ability to generate more millionaires will depend on whether it can maintain a favorable environment for its greatest resource: entrepreneurs.
Erica Tay
Director of macro research at Maybank
The metropolis was designated as one of China's first special economic zones in 1980, opening the city to foreign investment, technology and market-oriented reform.
The proximity to Hong Kong, which is typically business-friendly and efficient, has also helped Shenzhen learn to develop its economy, said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
“I think Shenzhen is the most promising city in mainland China in terms of economic potential,” he said.
With 50,300 resident millionaires, Shenzhen is currently the 27th richest city in the world, and at its current growth rate it should break into the top 10 by 2040.
“Looking ahead, Shenzhen's ability to generate more millionaires will depend on whether it can maintain a favorable environment for its greatest resource: entrepreneurs,” said Maybank's Tay.
New York tops the list as the richest city in the world, followed by California's Bay Area, according to a recent compilation from Henley & Partners. Tokyo and Singapore came third and fourth respectively.
