In a cruel reality, let’s talk about whether Chinese Americans in the United States are all wealthy. This may be a stereotype. In fact, there is a huge disparity in wealth among Chinese Americans in America. Why do some people classified as “Chinese” live in multimillion-dollar homes in Silicon Valley, holding stocks of tech companies; while another group lives in Chinatown, working in low-paying service jobs, and even end up near the poverty line in old age?
Let’s look at two examples: Xiao Chen came to the U.S. in the 1990s to study at graduate school, worked in Silicon Valley, bought a Bay Area home around 2000, both spouses have a 401(k), their child is in college, and now their home equity combined with stocks may already be worth millions of dollars.
On the other hand, Lao Shen came to the U.S. only in his fifties or sixties through relatives, with limited English proficiency, working in restaurants or service industries, lacking a complete retirement record, always renting, and can only rely on Social Security, SSI, or children after retirement.
Both individuals are labeled as “Chinese American” on the census form. But what they have experienced is almost two completely different Americas.
Although in overall U.S. statistics, Asians are often seen as an economically well-off group due to their higher median household incomes, the economic differentiation within the Chinese community presents a very typical phenomenon of “polarization”.
According to the Pew Research Center, based on 2022 U.S. Census data, among the major Asian ethnic groups in the U.S., Chinese Americans have the largest income gap. The 90/10 income ratio for Chinese American households reached 19.2 times in 2022, meaning that the income of the top 10% is 19.2 times that of the bottom 10%.
In this statistic, Chinese American households at the bottom 10th percentile have an annual income of only about $10,500, ranking among the poorest in all Asian ethnic groups; while households at the top 90th percentile of Chinese Americans have an annual income of over $200,000.
Moreover, the 90/10 income ratio for Chinese Americans has surged from 8.3 times in 1980 to nearly 20 times currently, far exceeding the pace of income inequality among other racial and ethnic groups.
In fact, the wealth structure of the entire American society often exhibits a “unimodal distribution” or “step gap disparity”, while Chinese Americans show an extremely rare “bimodal extreme differentiation”. However, it is important to distinguish between “income disparity” and “wealth disparity”: while complete income data for Chinese Americans exist, separate net asset data for Chinese Americans are lacking, so it cannot be definitively stated that “Chinese are the ethnic group with the largest wealth gap in America”.
Therefore, looking at the entire Asian group, 90/10 income multiples for Sri Lankan Americans, Korean Americans, and Pakistani Americans are all above 13 times, still lower than the 19.2 times for Chinese Americans.
How do Chinese Americans compare with White, Black, and Hispanic Americans? Here is some data from a Pew study, although the data is from 2016, the advantage is that all groups are calculated using the same 90/10 method, allowing for direct comparison:
Asian Americans overall have an income ratio of about 10.7 times, making them the group with the largest internal disparity, surpassing African Americans as the racially categorized group with the most severe disparity in wealth. African Americans have a ratio of about 9.8 times, being long marginalized by systematic asset deprivation, with a low median income, but high relative multiples between the upper and lower levels.
Hispanic Americans have a ratio of about 7.8 times, with a significant number in the middle class and labor sectors, leading to overall income concentration in the mid to low levels. White Americans also have a ratio of about 7.8 times, with complete generational wealth inheritance and the healthiest middle-class foundation, resulting in the highest median asset value.
Therefore, at least in 2016, the income disparity among Asian groups was higher than that of Black, White, and Hispanic Americans. It is noteworthy to compare the data from 1970: Asian Americans 6.1 times, White Americans 6.3 times, Hispanic Americans 6.7 times, and African Americans 9.1 times. At that time, African Americans had the largest internal disparity.
By 2016, Asian Americans had risen to 10.7 times. The Pew estimates that between 1970 and 2016, the 90/10 income gap among Asian Americans increased by 77%, far exceeding the 24% for White Americans, 15% for Hispanic Americans, and 7% for African Americans. Therefore, Asian Americans have not always been the racial group with the largest wealth gap in America, but have rapidly differentiated over the past few decades of immigration waves, with Chinese Americans being one of the most extreme cases.
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Although African Americans also face significant income disparities, the wealth disparities between Chinese Americans and African Americans are actually “two different wealth disparities”. The problem for Black families is more about the overall lower income and wealth levels, combined with internal income disparities.
For example, in 2022, the median income for African American families in the United States was only about $52,860, far lower than other racial groups, and a stark contrast to Asian Americans’ $108,700. So, Black families are closer to: “The entire distribution shifts downward.” While Chinese Americans are closer to: “The distribution skewed at both ends.”
On one side, Chinese Americans may be: tech engineers, doctors, financial professionals, entrepreneurs, real estate investors. On the other side, there are: new immigrants, restaurant workers, low-wage service workers, individuals with limited English proficiency, and elderly immigrants with very low incomes.
Therefore, the issue for Chinese Americans is not that “Chinese Americans have low incomes.” Quite the opposite – precisely because the high-income bracket among Chinese Americans is very successful, it is easier to overlook the existence of the lower stratum of Chinese Americans.
White Americans of course also have a significant wealth gap, especially when considering actual “assets” instead of just salaries, as some of the wealthiest American families are still largely concentrated within White households.
The wealth of White Americans is supported by multigenerational wealth inheritance, long-term real estate values, and retirement pensions, showcasing a standard normal distribution with the deepest middle-class base in America. In contrast, Chinese Americans present a gap: the top tier directly enters the top 5% income bracket in the U.S., but the lack of intergenerational capital accumulation creates a relatively narrow transition zone between both ends.
Additionally, Whites have a feature that Chinese Americans do not have as much: their immigration background is not as divided. Among Chinese Americans, there may be simultaneous groups of: Taiwanese and Hong Kong professional immigrants from the 1980s, engineers and students studying in the U.S. during the 1990s, high-skilled immigrants from mainland China in the 2000s, investor immigrants, family-sponsored immigrants, elderly family-reunification immigrants, as well as second and third-generation American-born individuals.
These individuals may all be statistically categorized as “Chinese American”, but their English proficiency, education, capital, age, professional qualifications, and social networks at the time of arrival in the U.S. could vary greatly. Hence, the class disparity among Chinese Americans can easily be magnified by the “wave of immigration.”
Looking beyond income to assets, the problem may be even more severe. According to the 2022 Federal Reserve Consumer Finance Survey (SCF), for the first time, reliable estimates of Asian American household wealth can be made: the median net assets for Asian American households are $536,020, with an average net worth of $1,826,860, making the average more than three times the median value.
White households have a median net asset of $285,010, with an average net worth of $1,367,170. Hispanic households have a median of about $61,000, and an average of about $230,000. Black households have a median of about $45,000, and an average of about $210,000.
This means that a very affluent group of Asian American households is strongly pulling up the overall average. However, it must be emphasized that the Federal Reserve only provides data for “Asian” and does not specifically disclose net assets for Chinese Americans.
Examining the data above also reveals that: White Americans have overall high assets, with a significant amount owned by the top tier, Black Americans have low overall income and assets with a large internal income disparity.
Hispanic Americans have low overall income and assets, but the internal distribution of income is not as extreme. Asian Americans have high average income and wealth, with significant internal differentiation, especially among Chinese Americans, where not necessarily “many poor people exist”, but rather “a significant presence of extremely wealthy individuals and extremely poor individuals at the same time.”
When examining the wealth accumulation of Chinese Americans in the U.S., what truly widens the wealth gap is not just the “level of income,” but rather the transfer of income into real estate, equity in businesses, and financial assets.
Firstly, high-paying professional jobs have been the most typical path in recent decades. Occupations such as engineers, software developers, doctors, dentists, pharmacists, finance professionals, accountants, and lawyers, rely on high education and high incomes to establish a stable cash flow. However, this model is essentially still “trading labor for income,” so the ability to move into a higher wealth bracket ultimately depends on whether the high income is converted into assets.
For many Chinese families, the core of their wealth is actually not in stocks, but in real estate. The typical pattern is: purchase a primary residence early on → property value rises → mortgage gradually paid off → net worth increases → then purchase investment properties.
In regions with long-term rising property prices such as California, New York, Seattle, and Boston, if first-generation immigrants bought property twenty to thirty years ago, solely depending on home equity may lead to significant family wealth accumulation. Therefore, “when to immigrate and when to buy a house” can greatly impact today’s wealth gap.
Of course, many Chinese families also engage in small businesses and family enterprises, which have been a classic path for early Chinese immigrants to achieve economic independence. Establishments such as restaurants, laundromats, grocery stores, supermarkets, import-export businesses, wholesale operations, logistics, beauty and nail salons, hotels, and real estate agencies, have been typical business avenues for Chinese immigrants.
The advantage of these families lies in the fact that they are not only earning wages but also acquiring equity in the business itself. If the business grows, the rate of wealth accumulation may far exceed that of salaried workers. Many Chinese families may even transition from “running a business” to “buying storefronts, purchasing commercial real estate”, converting sales revenue into real estate wealth.
Start-ups, stock options in tech companies, and professional careers are also viable paths, differing from standard small businesses. Success in startup tech ventures, medical clinics, dental practices, law firms, accounting firms, investment firms, etc., can lead to the highest wealth accumulation through ownership.
For example, among engineers, one individual works at a large company earning a $300,000 annual salary, while another starts a business and holds a 10% ownership stake in the company. Initially, their incomes may be similar, but the wealth gap could end up being tenfold or even hundredfold.
With the wealth accumulated by the first generation through homeownership, entrepreneurship, and investments, Chinese Americans enter the second generation. While it may not always involve inheriting millions of dollars directly, parents assisting with college tuition, providing down payments, offering startup funds, allowing children to live at home, and transferring real estate, all have a huge impact on wealth accumulation. The trajectory of asset accumulation for someone who can afford a $300,000 down payment in the Bay Area at age 30 versus someone who must save for a decade on their own is completely different.
Furthermore, there is a group of Chinese Americans who did not start accumulating wealth only after moving to the U.S., but already had businesses, properties, or investment assets in their home countries, which they later diversified by purchasing homes, commercial properties, establishing enterprises, or investing in funds upon entering the U.S.
As a result, in the statistics for Chinese Americans in the U.S., one can find both “newly arrived immigrants starting from scratch” and “families of immigrants arriving with millions of dollars in assets,” which is one of the reasons for the particularly stark wealth distribution disparity within the Chinese American community.