“The mainland now has more billionaires than any place other than the United States,” reports the state-run China Daily today. As China’s ruling ’communists’ gear up for their 17th party congress, the country’s top capitalists are literally laughing all the way to the bank!
By Vincent Kolo, CWI Shanghai

On the newly publicised Hurun rich list for 2007, compiled in Shanghai by financial analyst Rupert Hoogeperf, there are 106 dollar billionaires in mainland China, up from 15 last year and none in 2002.

The list shows that the wealthiest 800 individuals in China now have combined personal assets worth $459.3 billion, or a whopping 16 percent of the country’s gross domestic product (GDP). This sum is equivalent to almost all the foreign direct investment (FDI) in China over the last 20 years.

26-year-old Guangdong property heiress, Yang Huiyan, is now the richest person in China according to the list. Her fortune, estimated at $17.5 billion by the Hurun list means Yang, who heads a Guangdong-based property empire is more than seven times richer than last year’s richest Chinese, Huang Guangyu, the electrical appliance tycoon, who owns Gome stores. Huang dropped to tenth place on this year’s list, although he is hardly likely to complain, having seen his net worth rise 50 per cent to $3.6 billion in a year.

Poverty of statistics

Last week, Forbes also published their annual rich list, of China’s 40 richest people. Almost one-third of the billionaires on their list – twelve individuals – are involved in the booming property sector. “Their rise reflects a sharp rise in Chinese real estate prices over the past year,” commented China Daily (9 October 2007).

The annual Forbes’ and Hurun lists – always controversial – give pause for thought at a time when hundreds of millions of Chinese workers and peasants are struggling, literally, to survive. China’s poverty statistics are among the most ’massaged’ of all official statistics. Based on the Chinese government’s measure, there are more people living in poverty in the United States (36.5 million) than in China (23.6 million). This of course is absurd.

The explanation for this is that China’s official poverty threshold is so low: 683 yuan (64 euros) – a year! This definition only takes account of food and clothing, ignoring hugely expensive items like medical services, education and housing. If the World Bank’s normal definition of ”absolute poverty” – less than one US dollar a day – is used instead, there are over 200 million living below this level in China. One statistic from the Chinese media that is unlikely to capture the same global interest as the billionaire rankings is the existence of 1 million homeless children in China’s cities, described as ”waifs and strays” in China Daily (10 October).

Bankers of the world unite!

Aside from property speculators, the banking and insurance sectors are the most heavily represented in the latest wealth rankings. Nine of those on the Hurun list made it due to their shareholdings in Minsheng Banking Corp, which on Monday (8 October) became the first Chinese bank to acquire a ’strategic stake’ in a US bank. Minsheng announced it would buy 9.9 percent of UCBH Holdings, a California-based bank. China’s first privately owned bank, listed on the Shanghai stock market in 2000, Minsheng is now the seventh largest bank on the mainland and reported a 65.8 percent increase in net profits in the first half of this year. It specialises in lending to the country’s fast growing private sector.

China Daily lauded Minsheng’s success in the US market in an editorial (11 October): ”the move bears testimony to the progress Chinese banks have achieved in transforming themselves into ingenious commercial lenders.”

Minsheng and other Chinese banks had ”created stunning returns for their foreign investors,” this newspaper added.

Seven of the Hurun’s top billionaires are linked to Ping An insurance (Group), the private company which is now China’s second largest insurer. Ping An ”marries Confucian values with an aggressive Western management style,” according to Asiaweek. It has been a trendsetter in the ’reform’ of China’s finance sector, integrating with US investment banks like Morgan Stanley and Goldman Sachs through strategic shareholdings. State-owned China Merchants Bank still holds a majority stake in Ping An.

China has become one of the most unequal societies in the world as a result of the pro-capitalist policies of the last two decades. The obscene wealth of its capitalist elite, highlighted in such reports, is bound to stoke even greater resentment and opposition to the policies of Beijing’s dictators.