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Bilionaires in China

Saturday 7 November 2009

No recession for China’s super-rich

Friday, 30 October 2009.

China will soon have more dollar billionaires than the U.S.


The super-rich in China are living it up! While 41 million workers have lost their jobs in the last year and millions have suffered wage cuts according to a Chinese government think-tank, the country’s luxury market is expanding fast. State media says China has become the world’s number two luxury goods consumer after Japan. Louis Vuitton, the French elite brand, has opened one new store a month this year in China. Last year the company was threatened by a boycott campaign as part of a nationalist backlash against Olympic-related protests in Paris. Today the super-rich seem to be in no mood to boycott.

AFP (27 October) reports that “Beijing is the world’s number three market for Rolls-Royce after Dubai and Abu Dhabi – 52 Phantoms were sold here in 2008, one per week, with a price tag of seven to 10 million yuan”. A luxury car dealer in Beijing told AFP, “For rich people, this is just pocket money. They are billionaires!”

“China’s wealth is growing at breakneck speed,” the Shanghai-based Hurun Report’s publisher Rupert Hoogewerf said when the latest edition of this list of the country’s 1,000 richest people was released in mid-October. The collective net worth of the 1,000 on the list totalled 571 billion dollars by September 15 of this year, which is more than the entire GDP of Indonesia or Belgium.

On the list there are a total of 130 dollar billionaires, up from 101 a year ago and none in 2003. Many on the list made their fortunes in real estate and the stock market. This is thanks to the Chinese government’s efforts to stimulate the economy, notes the Wall Street Journal.

“You can double the real number of billionaires in China to 260,” says Hoogewerf. He points out that China already has the most known dollar billionaires after the United States. A 2009 Forbes magazine survey of the global super-rich counted 359 billionaires in America.

“There are still a large number of billionaires off the radar screens [in China], managing to build up substantial wealth away from the public spotlight from property, the stock market and investments,” says Hoogewerf.

The number one billionaire this year is Wang Chuanfu, the founder of rechargeable battery and electric car maker BYD, whose fortune increased more than five-fold to 5.1 billion dollars (34.8bn RMB). This sum is equivalent to the entire GDP of Tibet, and more than two-thirds of the Chinese government’s housing budget for the 2009 fiscal year (49.3bn RMB). As the quest for a viable electric car is stepped up worldwide, Wang’s company shares have rocketed this year with a lot of help from billionaire U.S. investor Warren Buffett.

Zhang Yin, the woman who founded paper-recycling company Nine Dragons Paper and China’s richest person in 2006, was in second place on this year’s list. She triggered a storm of protests on the internet last year when, in her role as a delegate to the CPPCC (China’s consultative ‘parliament’), she proposed a tax cut from 45 to 30 percent for the well-to-do. She also wanted to exempt labour-intensive companies from signing permanent contracts with workers after more than ten years’ service – as required in China’s 2008 labour contract law.

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