India, China emerge as new money hubs

Bs_logoImage
Press Trust of India Dubai
Last Updated : Jan 21 2013 | 2:54 AM IST

The depth of the financial crisis and the various speeds at which different regions are recovering will accelerate the tectonic shift in global wealth distribution to the East, with China, India and the Middle East emerging as new wealth centres, says a study by management consulting firm Booz and Company.
   
While a majority of the industrialised countries are just beginning to recover from the financial crisis, most emerging markets have already returned to pre-crisis growth rates, the study says.
   
"These varying rates of recovery will persist for the next few years, shifting the global wealth concentration to the East," it said, adding that the slump in the construction sector is likely to see Dubai's economy contract another 0.5 per cent this year.
   
According to the study, countries rich in natural resources are likely return to accelerated wealth creation even before the global economy fully recovers.
   
"Emerging markets, led by China, India and the Middle East, will be the main places where new wealth is generated in coming years. With fundamental private banking needs in these regions underserved today, wealth managers should be looking for ways to penetrate these markets."
   
"However, the Asia-Pacific region, led by China and India, will be where most new HNWIs are created, driven by the strength of the underlying economies and a strong entrepreneurial spirit," the study said.
   
Government-led infrastructure projects will further boost the HNWI (high net worth individual) population in these regions, and many affluent/HNWIs will prosper directly, via family businesses and small and medium-size enterprises, or indirectly, by inheriting wealth from older generations.
   
"By 2011, the number of HNWIs in Asia/Pacific is expected to surpass those in Europe and North America, with China moving ahead of the UK in absolute number of HNWIs. By the end of 2011, nearly 3.6 million (33 percent) of the global HNWIs are expected to live in the Asia-Pacific region, up from 2.6 million in 2008."
   
"While the underlying dynamics are fundamentally promising for private banks, the industry must navigate through a number of significant changes going forward," Booz and Company's study said.

Subscribe to Business Standard digital and get complimentary access to The New York Times

Smart Quarterly

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

SAVE 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories

  • Over 30 subscriber-only stories daily, handpicked by our editors

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

First Published: May 18 2010 | 2:55 PM IST