Photo: Wang Jianlin
By Kang Yi (康怡)
Issue 637, Sept 16, 2013
News, page 5
Translated by Zhu Na
Original article: [Chinese]
The worst period for the Chinese economy seems to have passed - at least for China’s ultra-rich.
The latest Hurun Rich List, released on Sept 11, showed that the average wealth of the entrepreneurs listed had risen by 18.5 percent over last year. But rather than indicating a recovering economy, this could just be an illustration of the “Matthew Effect” where the rich get richer and the poor get poorer.
59-year-old Wang Jianlin (王健林), chairman of the real estate giant Wanda Group, became China’s richest man for the first time with his 135 billion yuan. This broke the previous 130 billion yuan record for the wealthiest Chinese.
Compared to last year, Wang’s wealth increased by 108 percent. Founder and Chairman of Hangzhou Wahaha Group Zong Qinghou (宗慶后), who held the top spot last year, fell to number two this year but still saw his wealth grow by 44 percent. Founder of Tencent Ma Huateng (馬化騰) came in at third after his fortune grew 51 percent. The wealth accumulation rate of all these entrepreneurs far outpaced the growth of the Chinese economy, which only grew by 7 to 8 percent.
Wang Zhongmin (王忠明), vice secretary-general of the All-China Federation of Industry & Commerce, says that even though China’s economic growth is slowing, wealth accumulation of the rich is speeding up. He says this indicates that private enterprises of a fairly large scale have started to enjoy a certain economic inertia.
“Taking Wang Jianlin as an example, his industry structure is prepared for the future,” Wang Zhongmin said. “It’s not only involved in real estate, but is also internationalizing and branching out into culture. Wang has already accelerated and has inertia. Because his development is healthy, the government and other sectors will provide him with more support in terms of resources.”
According to Hurun, the shift in this year’s rich list is a sort of microcosm of the industrial structure adjustment in China. “The wealth of the Rich List this year reached a new record mainly through the real estate industry recovery and the rapid development of IT,” Hurun said.
Hurun also gave a nod to the progress of China’s urbanization, which was hoped to become the biggest engine driving China’s economy during “Twelfth Five-Year Plan” period (2011–2015). “No one is more representative than Wang Jianlin to represent China’s urbanization progress,” it said.
Wang’s Wanda Group has branched into four industries including commercial real estate, high-end hotels, cultural tourism and department store chains. It’s opened 72 Wanda Plazas, 40 five-star hotels, 6,000 cinema screens, 62 department stores and 68 karaoke clubs across China.
Wanda Group had total revenue of 141.7 billion yuan in 2012 with a profit of over 20 billion yuan. According to Hurun’s estimate, 80 percent of Wang Jianlin’s wealth comes from real estate.
But the IT industry had the biggest gains this year. Three out of the top 10 richest Chinese on the list are in IT, and the total number of entrepreneurs on the list involved in the IT industry increased over 20 percent since last year.
One of the best representatives on the list was Xiaomi Founder and CEO Lei Jun (雷軍), who came in at 63rd. His wealth grew 567 percent from 2.4 billion yuan last year to 16 billion yuan this year. Xiaomi’s MI mobile phone is one of the most popular domestic made models in China, reaching 12.6 billion yuan in sales in 2012.
However, the Rich List showed that not all of China’s super rich had such a good year. 252 entrepreneurs saw their wealth shrink, of which 77 percent came from publicly-listed companies. Six people experienced more than a 50 percent drop in their wealth and 115 entrepreneurs who made the list last year fell off altogether this time.
It was the clothing and liquor industries that saw the biggest loss of wealth. Iron and steel, minerals and non-ferrous metals also saw big declines. Many entrepreneurs from these industries fell off the Rich List this year.
The Hurun Rich List is being regarded as a mirror of China’s private economy. Wang Zhongmin says he hopes to see more private bankers on the list in the future. Gradual financial reform may allow this to happen. Meanwhile, Hurun says that the entertainment industry will be the most likely “dark horse” to make a splash in the future.
However, Hurun warns that the people on its Rich List are just the top of the iceberg. “Behind each of the people with ‘transparent wealth’ there are two rich people with ‘hidden wealth,’” it says. “There are 1,000 rich people ranked in our list, which means there should be more than 3,000 if you count those with hidden wealth.”
