By: Richard King
There is much talk about China’s economic growth over the last decade. Annual GDP growth consistently at 9-10%; now rated as the world’s second largest economy recently surpassing Japan and creeping up on the U.S.; Chinese companies now investing in other countries within Asia, but also in Africa, Europe, South America and the United States; China making significant progress in technology, high speed trains, underwater research vehicles and stealth bombers. All this is very impressive but there is another growth trend in China that we tend to overlook: The creation of billionaires!
China now has more billionaires than any other country in the world, except the U.S. According to the “Huron rich list” there are currently 130 billionaires in China compared to 350 in the United States. Some observers note that you can probably double the number of billionaires in China because many of them stay “below the radar”.
Most Chinese business leaders who are on the “Huron list” made their fortune in real estate and related industries that are tied to China’s rapid progress in urbanization. The richest man in China, Zong Qinghou, runs the Wahaha Group that makes soft drinks. Another rich man in China, Wang Chuanfu, founded a business which produces hybrid electric cars and one of his investors is Warren Buffet.
In addition to the billionaires in China, there are an additional 1 million people who are worth more than 2 million dollars. It is also interesting to note that the billionaires in China have been insulated from the global financial crises where billionaires in other economies have shown considerable losses.
Approximately 1% of the billionaires in China inherited their wealth compared to 25% in the UK and 35% in the U.S. The typical profile of a Chinese billionaire is a man about 50 years old who may have started business 20 years ago and has made his money from real estate and property development. A hundred women are among Chinese billionaires and more than one thousand women have wealth over 5 million dollars. Chinese women make up more than 50% of the world’s richest women. The hobbies of Chinese billionaires include travel, swimming and golf.
The fact that there are now so many billionaires in China is not necessarily welcome news to other Chinese in the country. Many people including government officials indicate that the gap between the rich and poor is rapidly growing and is already too large. In a recent speech by Chinese Premier, Wen Jiabao, he stated that the government must do something to contain a widening income gap. “We will not only make the pie of social wealth bigger by developing the economy, but also distribute it well”.
I have been doing business with China since 1979 and have seen firsthand the emergence of many billionaires who were struggling entrepreneurs not too many years ago. I believe the challenge for Chinese billionaires and wealthy families is to direct some of this wealth to enhancing the quality of life on the planet.
Chairman Emeritus of Woodbury University
Director, Pacific Rim Programs at Woodbury University
Chairman/Founder King International Group
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