China: The Richest of the Rich

The feast of the richest

Hurun and Forbes have recently put forward their 2007 lists of Mainland Chinese magnates. The two lists share a common perspective that the wealth of the well-offs has radically increased. The combined net worth of the top 40 on Forbes rose sharply from $38 billion in 2006 to $120 billion this year and the richest, Yang Huiyan, has a net worth of $16.2 billion that is more than seven times that of last year's richest person, appliance retailer Huang Guangyu, though Huang’s wealth has a $14 billion increment.

Another point the two lists share is that real estate has been a billionaire-cradle last year because 6 of the top 10 on both lists have business related to property development. Many newcomers gained bonanza on this lucrative field as well. It’s in accordance to the heat on Chinese property market.

The notable richest person, Yang huiyan(杨惠妍), a 26-year-old married woman was a typical case. Her father Yang guoqiang is the founder of Country Garden Holdings Ltd, a real estate developer related to numbers of sales miracles and path-breaking marketing methods. On its IPO in Hong Kong in 2007, the company quickly gained dazing wealth and then Yang transformed 70% of shares to his daughter, a graduate from Ohio State University.
The richest mainlander

Another feature worth concern is that the rich from southern area of China have not been eclipsed by those from Beijing and Shanghai that have developed quickly by dint of Olympics. 13 on Forbes come from Guangdong province, including Ma Huateng, the founder of Tencent and QQ.

From the lists, people can find the rich on new-tech area on the shade of property developers. Only three persons come from field. As the founder of LDK Solar which is an energy company that engages in solar power application, Peng xiaofeng took the 6th place on both lists and was considered a leader of high-tech sector. His company IPO on New York exchange this year.

Anxiety behind prosperity

Though property developers gain a big success as reflected on the lists, their wealth derived from the real estate market are disputable.

Yang Gengshen, a financial commentator worries about the blossom of property industry:


When 1/3 richest are occupied by real-estate developers that are enjoying their prosperity, myriads citizens have to suffer the great bank debts like slaves of their houses, shelling out their lifetime accumulation to developers. A wealthy club that commanded by developers actually means a national economy controlled by them. Whatever, a list crammed with property developers shouldn’t be a carnival of a certain industry but an alarm.

Tang Xuepeng expresses his questions of property industry:


This is quite a dangerous signal. As Galbraith said, if the richest in a country are all business man that speculate on lands and houses, the country is in danger. I interpret it as this: the land and mines are monopolized resources that are readily under rent-seeking.
By hoarding the houses developers pushed up the housing price that, for example, in Shenzhen which has gone up by 70% during five months. The public worry so much about the skyrocketing price.
On the other hand, their rate payings are questionable. The infamous title “wealth giant, taxpaying dwarf” has been following them

Wang Qing directly points out developers’immorality:


The developers openly forestalled, made illegal subscription, had under-the-counter speculation and conspired with corrupted officials, putting aside the responsibility enterprises should take.
Meanwhile, most citizens nevertheless have to toil much and suffer from mental and financial pressure for a single set of apartment. They are called the slaves of houses. Some low-income people pay their lifetime but get not a corner of a house. A 50-year-old woman in Xi’an drowned herself because she could not afford the housing for her son. Her struggle is not for her incompetence or the injustice of fate, but as a bleeding complaint of the raising price manipulated by developer group.

A carnival in capital market
According to Forbes, the IPO of Country Garden spawned 5 people on the list. Also, Beijing celebrity developer Zhang Xin has cashed in by listing SOHO China in Hong Kong. Capital market becomes the rich’s bonanza from which they quickly accumulated large amounts of money. Public opinions approve that enterprises thrive on the capital market though some analysts admonish an abuse of this tool.

Ye Tan commented on 1st Finance Daily:


Capital market should mainly evaluate the worth of wealth as a platform for ownership exchange. But because the capital market of China is still on the elementary stage, many capital players speculated to gain a high worth. When the increment on property worth comes to be pure bubble, the wealth will have to be turned back to what it really is.……
The capital market might be a roll booster of entity economy. However, as the Chinese wealthy rely so much on it and that it has created so many mythologies, its function has been exaggerated.

More voices in 163 net café.

Let’s finally watch how commons in have reacted to the new lists.

A netizen from Shandong argue against the developers

就是 中国的强大是靠实实在在的技术和高素质的人来实现的.如果靠盖房子的这样的投机分子,那么真是民族的悲哀.

The power of China should be gained by solid technology and talents with high quality instead of the speculators that build houses. It’s a misfortune of Chinese people.

A netizen from Tianjing argues


Legal belongs are protected by laws, no matter much or little. People on this planet all know that! But are their possessions legal? Who should come to define that?

But a Beijing netizen rebuked:


We are a red-eye nation! (Red-eye means jealousy in Chinese)
To rely on you such fanatically clamorous young men to thrive our nation is nothing but a pipe-dream.

A long way to go

The wealthy list of Mainland China is volatile. Some famous names enrolled on the lists years ago have vanished and some people have even been put into prisons because of their original sin during their causes. That’s why many rich refuse to be exposed on the list since it incurs them more concerns. As the gap between the rich and the poor is going wider, the Enmity between the two is also intensifying. The mission to really build a harmonious society still has a long way to go.

1 comment

  • Earl Bowen

    It seems that the Chinese government and people have the same problems that we in the United States have. Worries about Political and Business corruption, Income disparity, distuction of our natural resourses among others. The common factor seems to boil down to honesty in our leaders in both countries. I don’t compleatly trust either group of leaders. But I do see an advantage in the American Government in that we can get rid of (in theory) the scoundrals when they get to out of hand. As long as the leadership in any country is honest and selfless the people will prosper. How well they prosper accross the classes is an indicator as to how honest and selfless the leadership truly is. Hmmm….how do you think each countries leadership is actually doing? How are other countries doing?

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