How Asian Families Could Shape the Future via Impact Creation
Asian family offices can shape the future via impact creation, says Professor Winnie Peng, Director of the Roger King Center for Asian Family Business and Family Office.
[The content of this article has been produced by our advertising partner.]
By Professor Winnie PENG
Director of the Roger King Center for Asian Family Business and Family Office HKUST Business School
The development of Asian wealth
Asia is regarded as the world’s leading economic growth engine. The region’s gross domestic product (GDP) in 2021 was 6% higher than that prior to the COVID-19 pandemic. In the five years up to 2021, Asia’s economy in terms of GDP expanded by 21%, as indicated by the China Family Office Report 2022.1 According to the Forbes Billionaires List for 2021, Greater China – including mainland China, Hong Kong, Macao and Taiwan – had a grand total of 744 billionaires, while there were 724 in the United States and 617 in Europe. The average age of Asian billionaires is just 59; Chinese tycoons are the youngest, at 55 on average.
Hong Kong has the highest density of wealthy people in the world. With 9,679 ‘very high net worth’ individuals per million adults, Hong Kong leads all other countries by a significant margin, according to Wealth-X in 2020.2 Hong Kong is also home to most of the mature Asian single family offices with a 30-plus-year history. Many of these are closely related to the local family businesses, which account for over 60% of GDP in Hong Kong and 68% of listed companies.3 Bloomberg reported that of the top 10 Asian richest families in 2022, Hong Kong was home to five of them. The family wealth was usually generated for two generations or more, with funding sourced from the income of the family businesses. These represent the ‘old wealth’.
Mainland China has enjoyed tremendous economic growth over the past two decades and has generated an incredible amount of wealth. According to Ernst & Young’s 2021 report, the total AUM for mainland China was valued at $10.79 trillion.4 It is also estimated that mainland China is now the world’s fourth-largest asset management market. In 2022, Fortune 500 indicated that China has been performing exceptionally well economically, achieving top global ranking for three consecutive years in terms of number of companies. In contrast to Hong Kong, the development of both family businesses and family offices in mainland China is still very much in its early stage. The longest history of a large family business in mainland China is about 40 years, so most family businesses are still in their first generation. They represent the “new wealth”.
