China’s fast growing economy is producing a wealth of tycoons: Two new billionaires a week as entrepreneurs take advantage of the country’s economic liberalization. In 2006 there were only 16 billionaires in what is now the world’s second largest economy, but that figure has grown to 373, making up nearly a fifth of the global total.
‘China is currently the leading country for entrepreneurs to create wealth,’ said Dr Marcel Widrig, partner and private wealth leader at PWC. ‘Nowhere has the same combination of a huge population, technology, innovation and government support.’ Almost all Chinese billionaires are self-made, with just 3% inheriting their fortune. However, the new fortunes come with a high level of risk; although 106 Chinese crossed the 9-zero mark last year, 51 dropped off the list again.
Joseph Stadler, head of Ultra High Net worth at UBS Global Wealth Management said: ‘What we have seen in the past is that Silicon Valley invents. Asia copies. What we see today is a world movement where China stops copying, and China develops and disrupts on its own and re-exports to the rest of the world. Chinese businesses were leapfrogging other industry leaders,’ he said, adding: ‘They can do that because of massive scalability and a mass market that is 3 to4 times as big as the United States.’
The total worth of Chinese billionaires is now1.12 trillion dollars. Half of the wealth enjoyed by China’s billionaires comes from three sectors: real estate, technology, consumer and retail. Experts said this reflects the country’s rapid development, after the government began loosening economic restrictions and allowing private enterprise. Early entrepreneurs made real estate fortunes as the population moved from the country to the city. A burgeoning middle-class, combined with the growth of communication technology has now fuelled a boom in technology and e-commerce.
But while the number of people living in poverty in China has dropped significantly in recent years, at the end of 2016, 43 million still lived below the Government’s official poverty line of 2,300 yuan income per year (that’s £258).
It’s truly remarkable how China is now competing with the world’s biggest economies to become a gigantic force to reckon with.