x Abu Dhabi, UAE Thursday 20 July 2017

The number of Chinese billionaires is on the rise

The great disparity between wealthy and working class people in China is causing a certain amount of angst in the once hardline communist country.

Clockwise from left - Wang Chuanfu, the chairman of BYD.
Clockwise from left - Wang Chuanfu, the chairman of BYD.

Property moguls, technology entrepreneurs and manufacturing tycoons are filling up new lists of the country's growing class of the super-wealthy, but their gains are widening the income gap in the populous nation. Clifford Coonan, foreign correspondent, reports Some of this select but expanding group are university graduates, while others are former employees of state-owned enterprises. Some even started their careers as bricklayers or in Communist Party cadres.

What they all have in common is that they are the country's millionaires and billionaires - the "new nobility", as one writer put it - that has emerged in China since the communist government adopted a policy of "socialism with Chinese characteristics" in 1978. Deng Xiaoping, the country's leader at the time, helped get it all going when he declared that it was glorious to get rich. In many ways, this is the glorious generation that the late Deng had proclaimed. China has 825,000 individuals worth more than 10 million yuan (Dh5.3m) and 51,000 people with more than 100m yuan.

They have become rich by buying former state-owned enterprises as well as by building upon their own ideas. But among the generations of people brought up on the struggle against capitalist running dogs and landlords, there is strong mistrust about the super rich in China, particularly property developers. Opinion polls in the state-controlled media suggest many Chinese are suspicious of those who have made a great deal of money during the country's economic reforms, believing them to be corrupt.

But few have anything but respect for people like Wang Chuanfu, the founder of the battery maker and car manufacturer BYD and China's richest man, according to both of the country's wealth arbiters, the Hurun Report magazine's rich list and Forbes magazine, which said he was worth US$5.8 billion (Dh21.3bn) in 2008. A chemist working in research for the government, Mr Wang, then 29 years old, borrowed start-up money from his relatives in 1995, rented a small factory and started making rechargeable batteries.

He grew up in dire poverty as both of his farmer parents died while he was young. And like many of the entrepreneurs building China's boom in the past three decades, Mr Wang is a driven man. The characteristics of China's richest mirror changes that we see in broader Chinese society. In recent years, the ranks of the super rich have included property barons and dotcom tycoons. But with raw materials in short supply, the demand for recycled products has turned waste paper into gold for Zhang Yin, who has assets worth 33bn yuan.

Rivalling her for the crown as China's richest woman is a bricklayer's daughter, Yang Huiyan. With so much money sloshing around, it is hardly surprising that the World Luxury Association said that by the end of December last year, consumption of high-end goods in the country had reached $9.4bn. That was 27.5 per cent of the world's total as China became the second-largest market for luxury goods in the world, after Japan.

But one might wonder how a communist country could produce so many wealthy individuals. One of the big names to emerge in the property business is Pan Shiyi, a country boy from remote Gansu province who is often described as China's Donald Trump for his success at revitalising inner city areas. He has also been involved with entrepreneurship lectures and appears regularly on TV - he was even supposed to do a show with Mr Trump at one point, but it never come to fruition.

Through the SOHO group that he runs with his wife, Zhang Xin, Mr Pan is keenly interested in contemporary architecture and is behind most of the interesting new developments in downtown Beijing. Ms Xin was China's fifth-richest woman in 2008, with $1.8bn. The two tend to be listed together and they were the 32nd-richest in China that year. Shi Zhengrong, the chairman of Suntech Power, is an example of a tycoon who studied his way to the top. That makes him a major role model in China.

Time magazine has selected Mr Shi as one of its "Heroes of the Environment", while Fortune named him its "Asian Businessman of the Year". He also ranks in the high hundreds among the world's richest people in Forbes. His company's fortunes ebbed slightly last year, but he ranked seventh on the Hurun Report's 2008 list with $3.2bn. Educated at the University of New South Wales in Sydney, he got his PhD in record time. That helps make him very much a child of the new China, as he studied abroad, become a citizen of Australia and has transformed his ease of working in both China and the West into a multibillion-dollar enterprise.

And yet his background testifies to a much different China. Mr Shi and his twin brother were born on a farm on Yangzhong Island in 1963. Even so, reeling from the famine caused by Mao Zedong's disastrous agricultural experiment, the so-called Great Leap Forward, his parents could not afford to support the twins and two other children and gave Mr Shi up for adoption. Rupert Hoogewerf, the founder of the Hurun Report and its rich list, likes to call these fledgling Chinese billionaires the "new nobility". And nobility has its perks. Last year, Luxury Asia Limited China sold 15 private jets, says Meng Pengjun, the chief executive. A private jet costs about $20m, and then there is the $2m or so it costs every year to maintain it. The previous year the company sold eight jets, and this year they are looking at selling 20, he told the China Daily newspaper.

"It's feasible, because in just two months this year we've already sold four jets," he said. Despite the admiration for the self-made heroes, the wealth of some compared to the poverty of others is becoming a major political issue in China. China recorded its widest rural-urban income gap last year since the country launched its reform and opening-up policy in 1978. And there is no sign of the gap closing.

Urban per capita net income stood at 17,175 yuan last year, in contrast to 5,153 yuan in the countryside, giving an urban-to-rural income ratio being 3.33:1, according to data from the national bureau of statistics. business@thenational.ae