China’s economy is experiencing unprecedented growth as a whole and there’s a growing number of individuals who are entering the lists of the world’s rich – and even super rich. In their annual China Rich List, now in it’s tenth year tracking the people captaining the Chinese economy, Hurun Report has unearthed some truly stunning data amongst the 800,000 millionaires, and 106 billionaires, at the top of the financial pile.
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Speaker – Founder of the Hurun Report and China’s Rich List, Rupert Hoogewerf; author of The China Investor: Getting Rich with the Next Superpower, Cesar Bacani
CONNORS: The rich in China are growing faster than in the western world. For this year’s rich list you would have to have made more than 100-million US dollars just to get on the list of 800. When Rupert Hoogewerf first put it together in 1999 he struggled to find 50 people worth more than 6 million dollars.
The Shanghai-based Hoogewerf says it’s no surprise that the wealth of the members of the list also grew 104 per cent year-on-year.
HOOGEWERF: Well I think 2007 has been a true watershed year, in that a lot of the policies that have been developed over the past 5 years have really come to fruition so far as the personal wealth accumulation is concerned this year. So we’ve urbanisation as the key trend, the property developers have really blipped onto the radar screens worldwide. And then you’ve also got the capital markets which are beginning to get better access to these good businesses in China. Those have been the two key drivers this year.
CONNORS: To be rich, in China, is something new, and it continues to be something that is viewed with suspicion. Many of the early entrepreneurs got their start with financing from questionable sources.
HOOGEWERF: I think ten years ago when we started the rich list there was quite a lot of distrust for anybody who had made their wealth. They were bound to have made it through something called ‘guangxi’ – which is connections based on an underhand route. Getting land or getting good contracts. And I think that was the general feeling toward anyone that was wealthy – they were probably corrupt. However, I think over the past ten years there’s been a massive revolution, if you like, in the image of wealth, so that the people who make it to the top of the list today are seen to be more in a positive light. So you’ve got someone like Jack Ma from Alibaba, and he’s very much considered to be a star because he’s very international, he’s obviously very clever, he’s built a business which is not just a Chinese-beater, it’s actually a global player. And I think that sort of change we’re seeing in every sector. Because these people are beginning to become very scalable, and the numbers are quite staggering.
CONNORS: Author of The China Investor: Getting Rich with the Next Superpower, Cesar Bacani, has watched China’s rich take hold, from his base in Hong Kong, for nearly 20 years. He says there are still reasons for the wealthy to fear the system of ‘socialism with Chinese characteristics’.
BACANI: There is still distrust, I imagine a lot of those people on the list are really nervous. Because in China you don’t want to stand out, especially in the press. China is still a Communist country. If you set yourself up, if you become too prominent, then you end up in the cross-hairs of the tax people, the regulators, the Communist Party, everyone.
CONNORS: Bacani says a lot of the old-money millionaires have a lot to fear as the money trail is followed back to its roots, some of it to organised crime and corruption.
BACANI: If they’ve been in the business long enough they would have started in the grey area. Because in the past it would have been impossible for you to do this legitimately anyway. To begin with the private sector wasn’t supposed to be doing this and that and so on. So in the continuum of economic growth, while a lot of people are now making money legitimately, the provinence of that capital is still suspect. And you never know in China whether the government will make moves to investigate you, or make a lesson out of you.
CONNORS: But something that is emerging from the exploding number of new rich in China is the average age on Rupert Hoogewerf’s list. Of the top 800 wealthy in China, the age is dropping dramatically every year. And it’s often wealth that is unsoiled by corruption.
HOOGEWERF: There’s one key trend to be aware of in China, and that’s predominantly all these 800 people on the rich list are all self-made. They’re all first generation. Now the average age of these people is 47-years-old and that’s significantly lower that Western, Europe or Australian and the US. The reason it’s lower is that they’re self-made in one generation.
