Chinese Billionaires Growing Close to Power

Liang Wengen, chairman of the Sany Group

The number of Chinese billionaires (in dollars) continues to grow, reaching 146 in a list published yesterday by the U.S. Forbes magazine, which is 20 more than the number in 2010. The United States remains the world’s most wealthy with 417 billionaires. Hurun magazine, based in Shanghai, for its part assesses the number of Chinese billionaires to 271 – 82 more than last year.

This discrepancy in number between Forbes and Hurun explained by their different methods of calculation. The first takes the “private equity willing to invest” into account, while the second applies a less restrictive rule.

Forbes and Hurun both place Liang Wengen (梁稳根) at the top of their ranking, Liang is the co-founder of the company of Sany Heavy Industry, with a fortune of $ 9.3 billion built by the housing boom. The building construction, with soaring property prices, is the most buoyant sector this year for large fortunes. Forbes ranks Robin Li second, the co-founder of search engine Baidu has fortune of $ 9.2 billion.

The ranking of Forbes and Hurun however, are very incomplete, because in a country where income disparities are now among the largest in the world, the rich are reluctant to appear on the lists published annually by the literature. “I’ve actually listed at least 271, but the actual number of Chinese billionaires has more than 600,” says Rupert Hoogewerf, the director of Hurun. Same observation in Forbes. “More and more billionaires asking not to be included in our list,” explained yesterday in a Reuters spokeswoman for Forbes on the basis of “changing social climate.”

Billionaires and politics

About 60% of GDP is concentrated in the hands of 0.03% of the population according to the National Bureau of Statistics. These growing disparities and widespread corruption worried Beijing which fears social unrest. The billionaires are also aware that two ex-heads of Forbes list ended up in jail for corrupt officials.

However, it should not be mistaken: the billionaires club is close to the growing political power. “A third of the 50 richest people in China sit in the National People’s Congress” (NPC) or Political Consultative Conference, the China Daily said yesterday. Moreover, according to a report published last year Hurun, the 70 members of the NPC’s richest have a combined fortune of 493.1 billion yuan (77.25 billion U.S. dollars).

In comparison, the United States, according to the latest statistics, the 70 wealthiest members of the Senate and the House of Representatives, which have 535 members, only cumulative 4.89 billion U.S. dollars, or 16 times less than their counterparts in China. How these fortunes have been built? The “typical millionaire” is derived from power, according Hoogewerf: “This is a man of 51, who started doing business in 1993 after leaving a government job. In 1997, his fortune was already made, and it has only been bigger.”