By Frank Holmes
NEW YORK (TheStreet) -- A surprising wealth of information about the world's most prosperous people can be discovered in two new reports. The Chinese Millionaire Wealth Report 2012, put together by GroupM and the Hurun Report, found there are now a million millionaires in China.
On average, a Chinese millionaire is 39 years old, has an average of four luxury watches, vacations in France, and owns a business.
KPMG's The Wealth Report 2012 found there are 18,000 centa-millionaires (those with $100 million in disposable assets) in Southeast Asia, China and Japan, more than those in North America (17,000) and in western Europe (14,000). Most of the wealthy with $10 million or more are business owners.Over the next five years, wealth is set to rise rapidly across the Asian continent: KPMG estimates that centa-millionaires may increase by 114% in India, 76% in Russia and 65% in Hong Kong. This compares to a slower rise in wealth in the U.S., at 23%. We believe it's important to follow where wealth is being created and where these successful people reside, travel and do business. I believe these trends reveal subtle clues about how well money is treated around the world, especially from governments: Do countries pursue capitalist policies to encourage these wealthy people to stay, create businesses and grow jobs? Or do governments put in place socialistic policies that restrict innovation or push wealthy individuals to take their money elsewhere? There are many reasons 50,000 Germans live in Silicon Valley, and 500 startups in the San Francisco Bay area have French founders, says The Economist. In the U.S., the land of meritocracy and opportunity, businesses not only have the "freedom to fail" and plenty of funding for entrepreneurs, they also don't have the level of bureaucracy as you see in France. For example, "the cost of paying out large severance packages (six months of severance pay is typical even for very recent hires) can be a huge drain for a small company," says the magazine. European startups also find it difficult to offer stock options and free shares because of the "legal complexity of giving new hires free shares is prohibitive." There are so many limits in countries across Europe that there's a "dearth of the sort of entrepreneurial successes which would serve to inspire others; very few people think that going to work for a loony in a garage offers a long-shot at millionairedom." In other words, companies such as Apple (APPL), Fedex (FDX), Wal-Mart (WMT), Starbucks (SBUX) and McDonald's (MCD) aren't as likely to be created in Europe. The barriers to entry are too high. Read The Economist article here. In The Wealth Report, Buiter believes there will continue to be a greater leaning toward socialistic tendencies. He says, "Government may use more taxation instruments and globally there may be a further attack on tax havens. Recent governmental and intergovernmental activity in these areas is not a passing phase." The latest example making headlines these days is the proposed 75% tax increase on the wealthiest people in France in order to "pay for one of Europe's most generous social welfare systems and a large government." This tax increase is causing many individuals and businesses to consider relocating. The New York Times indicated that "many companies are studying contingency plans to move high-paid executives outside of France." Start-ups -- those businesses that are especially sensitive to any added cost to business -- are also said to be delaying plans of investing in the country, says The Times.
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