The rich are getting out while the getting is good
This weekend saw the Occupy Wall Street movement reach Japan, albeit in a more lowkey fashion (for the time being, at least). The income gap is widening in Japan, but because the rich are less prone to showing off their wealth and the media is polite and doesn’t draw attention to them (unless they ask for it), mostly what we know about this gap is at the lower end, with the ranks of the working poor growing by the day.
When it comes to the rich the main difference between Japan and America is that Japan, due to even shakier financial policies and the March 11 disaster, is becoming a riskier place for them to keep their money, and according to the weekly business magazine Diamond an increasing number are taking their assets, as well as themselves, overseas. The number one destination for such high-end economic refugees is Singapore, and not just among the Japanese rich. Chinese millionaires have voted for Singapore with their feet, too, for more obvious reasons. (Sixty percent of Chinese citizens with assets of at least 10 million yuan have applied or plan to apply for exit visas.)
There are three methods for rich people to gain permission to emigrate to Singapore: Be designated as a “retiree” with at least ¥1.2 billion in assets, of which ¥600 million is transferred to a Singapore-based bank account; establish a company in Singapore for ¥7 million and run it for at least 4 years; buy property in Singapore and apply for a resident visa. Some wealthy people may not find any of these methods possible or desirable, and right now Malaysia is moving in on Singapore as the destination of choice, because the conditions for residence are much simpler — and cheaper.
For the purposes of the article, Diamond defines a member of Japan’s “wealthy class” as someone with at least ¥100 million in assets. If a person holds ¥500 million then he/she qualifies for the “super wealthy class.” According to Merrill Lynch, in 2010 the ranks of the wealthy increased by 5.4 percent over the previous year to 1.74 million people, which is about 16 percent of all the wealthy people in the world (10.9 million). What makes the wealthy in Japan different from the wealthy in the rest of Asia is age. Ninety percent of Japan’s wealthy class are over 45, while 40 percent of the wealthy in the rest of the Asia-Pacific region is under 45, indicating that the rich in Japan don’t necessarily pass their wealth on to their children. In terms of households, Nomura Research says that there are 900,000 in Japan worth at least ¥100 million each, accounting for only 1.8 percent of all Japanese households but 20 percent of all financial assets.
As a side note, a Japanese association of car importers recently released figures showing that sales of super-expensive foreign automobiles are on the rise. Between January and September, 69 new Lamborghini Aventador LP 700-4’s, priced above ¥40 million, were sold in Japan, an increase of 44 percent over the same period in 2010; 55 orders for a brand new McLaren sports cars, priced at ¥28 million, were placed (the wait is 18 months); and 63 Rolls Royce Ghosts were purchased, each costing ¥35 million, an increase of 21 percent over last year. If that makes you sick with envy, then you should try to imagine what it’s like driving them on Japanese roads.