Why does HK see sharp decrease of billionaires?


The number of rich population in Hong Kong with current assets more than one million yuan shrunk to 530,000 in 2011, 31,000 fewer than a year earlier, said a report released by Citigroup on Feb. 28

Affected by the European debt crisis and capital flight, Hang Seng Index jumped nearly 20 percent in 2011. The assets of Hong Kong citizens who invest in stock considerably shrank and the number of Hong Kong millionaires and their assets dropped accordingly.

This proved that Hong Kong's economy over-relied on its financial section and citizens cannot get rich without investment, which caused the number of millionaires as well as Hong Kong's economy always fluctuate greatly along with the ups and downs of the capital market.

As an international financial center, Hong Kong must develop and cultivate more new economic growth opportunities and promotes the diversification of its industrial structure while continuing to strengthen its financial sector. Its citizens can rank in the list of "millionaires" through the growth of the real economy and wage hikes, instead of only getting rich through investment.

All the time, the financial service sector has accounted for the major share of Hong Kong economy. Single industrial structure has polarized the people's incomes, and lowered the economic resistance against crisis. Moreover, citizen's capital appreciation is overly dependent on stock market rise. The results are definitely good when the external economy creates a good capital market prospect; but if the economy situation reverses suddenly, the asset bubbles burst, many millionaires will suffer great losses or even go bankruptcy, and the real economy will also be affected.

The robustness of financial industry is rather important to Hong Kong. But it does not mean that only by relying on finance can all citizens benefit. A healthy economy must combine the real economy with the virtual economy.

Therefore, while continuing to consolidate Hong Kong's position as a financial center, the authorities should also focus on promoting the diversification of Hong Kong's industrial structure, promote the development of competitive industries and other high value-added industries, speed up economic diversification, provide more diversified investment channels for huge funds and lead the funds to the real economy.

At the same time, Hong Kong should also actively cooperate with the country's 12th Five-year Plan and carry out the measures supporting Hong Kong made by the central government. Only by maintaining economic momentum can Hong Kong create more opportunities for its citizens to start business and get rich.

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