China's Growing Economy Mints Billionaires

Discussion in 'China' started by Koji, Oct 15, 2009.

  1. Koji

    Koji New Member

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    http://www.nytimes.com/2009/10/14/business/global/14rich.html?_r=1&ref=asia

    BEIJING — The superrich in China have bounced back from the financial crisis with a vengeance, and China now has more known U.S.-dollar billionaires than any other country except the United States, according to a report released Tuesday.

    The annual Hurun Report said that China has 130 known dollar billionaires, up from 101 last year. The number in the United States is 359, while Russia has 32 and India 24, according to Forbes magazine.

    China’s rich are getting richer, with the average wealth on the list $571 million, up almost one-third from last year, said Rupert Hoogewerf, the report’s compiler. The Hurun Report is a luxury publishing and events group, its Web site says.

    “With the greatest wealth destruction in the West of the last 70 years, we’ve seen China buck the trend and the wealth seems to be still growing,” Mr. Hoogewerf said in an interview on the sidelines of an event to unveil the 2009 rich list.

    “They’ve put the credit crunch behind them,” he said. “The key driver has been urbanization. You’ve got all these cities being built, and that requires property developers, iron and steel manufacturers. The latest thing is cars.”

    Topping the list was Wang Chuanfu, chairman of the electric car and battery maker BYD, in which the American billionaire Warren Buffett holds a stake. Mr. Wang’s personal wealth is estimated at $5.1 billion. He was also the fastest riser from last year, moving up 102 places.

    Second place went to Zhang Yin and family, owners of the paper recycler Nine Dragons Paper, while in third place was Xu Rongmao and family, the owners of the Shimao property group.

    Huang Guangyu, who founded Gome Electrical Appliances and owns unlisted property businesses, sank to 17th place from the top position he held last year. He is being investigated for alleged financial irregularities.

    One famous name fell off the list this year — the basketball player Yao Ming, who has struggled with a foot injury for the past few months.

    China’s ruling Communist Party once condemned entrepreneurs and private business people as capitalist exploiters but has welcomed them since the late reformist leader, Deng Xiaoping, began landmark economic reforms in the 1970s.

    One-third of the people on the 1,000-name Hurun list are estimated to be Party members, according to the report.

    Mr. Hoogewerf said the actual number of dollar billionaires could be higher than estimated.

    “Either they are superdiscreet, or perhaps they haven’t come to the surface,” he said. He added that the transparency of wealth was, however, now much higher because of the greater number of listed companies.

    Mr. Hoogewerf said people who probably should have been listed, but about whose wealth not enough is known, included Liu Chuanzhi, the chairman of Lenovo, one of the world’s largest makers of PCs, and Chen Feng, the founder of Hainan Airlines.
     
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  3. Daredevil

    Daredevil On Vacation! Administrator

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    The increase in wealth is more due to Stock market bubble than anything else which is further fueled by cheap credit by public banks and stimulus by chinese government. While whole world is reeling under recession, China is creating more billionaires, what an irony :sarcastic:.

     
  4. Koji

    Koji New Member

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    To attribute sustained 10% growth for the last 15-20 years to inflation and subsidies is ludicrous. Especially now in the global downturn, the need for China is greater than ever. Only she can provide the goods the world needs at a modest price. In fact, this downturn might be helping her growth.

    http://www.nytimes.com/2009/10/16/business/global/16yuan.html?ref=business
     
  5. Daredevil

    Daredevil On Vacation! Administrator

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  6. Koji

    Koji New Member

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    A simplistic answer could be the opening of new markets. The downturn has some Chinese businesses looking places other than the US. Already, changes are being seen with Europe and Russia.
     
  7. sky

    sky Regular Member

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    Wrong.
    Any country in the developing world can produce cheap goods if they receive fdi
    from usa/europe.Soon china will raise the labour wage for her workers making there goods more expensive coupled with a rising currency.All this means china will not be able to sustain 10% gdp.
     
  8. Koji

    Koji New Member

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    Sky, what you're saying has been repeated for years now. China still sustains her growth rate. There is a reason why the FDI goes to China, and not to anywhere else. It is by chance.
     
  9. Daredevil

    Daredevil On Vacation! Administrator

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    The decrease in exports is overall not US specific. Even europe and Russia are reeling under economic recession. how you except to sell more to them when they themselves have stopped consuming more.

     
  10. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    Once the Chinese stock market and real estate bubble bursts, investors will be looking for other places to invest. China has 2 bubbles currently it will be worst when a downturn occurs ; it always does no matter how euphoric investors get.
     
  11. sky

    sky Regular Member

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    Yes it has,but there comes a saturation point,china is more or less a developed country.And to sustain such growth will get harder to achieve as time goes by.
     
  12. Daredevil

    Daredevil On Vacation! Administrator

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    See how China sustains its growth rate when whole world is going down under.

     
  13. Koji

    Koji New Member

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    Trade between the EU and China are not reeling.
     
  14. Daredevil

    Daredevil On Vacation! Administrator

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    I think you have habit of overlooking. You have missed my post number 8. Here is what I posted

    China’s exports are reported to have fallen by a record rate in 13 years in January by 17.5 percent against the same period of the last year as a consequence of dropped demand in the U.S. and Europe. Imports, at the same time, fell by a record of fell 43.1 percent comparing to the corresponding period of 2007. Exports fell 17.4 percent to the European Union, and 9.8 percent to the U.S.
     
  15. Vladimir79

    Vladimir79 Defence Professionals Defence Professionals

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    Why can only "she" provide the cheap goods the world needs? There are plenty of other developing countries to outsource to, and many more stable.
     
  16. Koji

    Koji New Member

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    You tell me? Why does FDI keep going there?

    My guess is established infrastructure (shipping, container facilities, roads, acces to raw materials etc) and experience in manufacturing. Plus there is an advantage in economy of size.
     
  17. Vladimir79

    Vladimir79 Defence Professionals Defence Professionals

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    It is caused by massive corruption of the CCP. They pour subsidies into their own corporations and pocket the rest. Those other billionaires who aren't party members play ball with the party and are rewarded and the same process starts all over again.
     
  18. Daredevil

    Daredevil On Vacation! Administrator

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    Yes, FDI goes there but has it increased in 2009??. Actually, FDI has decreased a lot this year but still china grows at 8%. Again things don't add up. This is what economists are claiming all over the world. There is serious problem with cooking the books in china to show high growth rates.

    Foreign Direct Investment Drops by 32.7 Percent

    China's FDI takes a dip for fifth straight month
     
  19. Koji

    Koji New Member

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    From your link daredevil:

    "Foreign multinational companies still find China very attractive, but their hands are tied — they don’t have spare money to invest,” Sherman Chan, an economist with Moody’s Economy.com. told Bloomberg. “Once the global economy shows signs of recovery, China will probably see a surge in foreign direct investment again.”
     
  20. Vladimir79

    Vladimir79 Defence Professionals Defence Professionals

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    FDI has dropped 14% for year total so far. The FDI is going to Afrika which has tripled since 2008. Investors are finding more profitable investments elsewhere.
     
  21. Daredevil

    Daredevil On Vacation! Administrator

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    It might be true and in future that is possible. What I have been trying to show is that there is a disconnect between the increase in number of billionaires to high growth rates and global economic recession, fall in exports, decrease in FDI. Things don't add up.
     

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