China is churning out billionaire after billionaire. It may not be long before the country finds its own answer to Carlos Slim, the richest man in the world. Chinese billionaires are fuelling the worldwide economy. The recently released China rich list from Hurun Report reveals that there are 271 US$ billionaires in the country. According to the Hurun Rich List 2011, Beijing is the favored residence for 111 of the 1,000 richest Chinese individuals. Shenzhen follows in second place with 83 residents, and Shanghai makes it to third with 80. One of the key findings on the Hurun Rich List 2011, however, is that real estate tycoons figure heavily on this roster of the Chinese luxury society.
Not that it is a surprise. Property prices have been on an upswing for a long while now. It has been enough to convince the Chinese government to effect immediate curbs on the runaway prices. However, this has not stopped China’s real estate billionaires from making it to the top spots on the Hurun Rich List this year. Four of the top ten richest Chinese are property barons. Last year, there were only two. As you look at the top 50, a thumping majority of 29 individuals have big stakes in the real estate business. According to Hurun Report, the construction boom in China and a growing retail market has provided the necessary fillip.
Having said that, the top 3 richest Chinese are not in the property business. Grabbing the top spot is last year’s No. 4, Liang Wen’gen. The chairman of heavy industries giant, the Sany Group, is estimated to have a personal fortune of $11 billion. Share appreciation in the Sany Heavy Industry Co., is largely responsible for his rise in wealth. Coming in second is last year’s No. 1 Zong Quinhou, chairman of beverage company Hangzhou Wahaha Group Co. Zong has $10.7 billion to his name. The third entrant is founder of search engine giant Baidu, Li Yanhong, with personal wealth of $8.8 billion.
Selecting the candidates for the Hurun Rich List 2011 is no exact science. However, the results provide an indication with regard to the importance of real estate in the Chinese economy. According to one now-discontinued government index, real estate prices increased by 6.4 percent in December 2010 compared with the same period in 2009. The government has been trying to reduce property prices by instituting governmental controls on real estate. The pressure on Chinese households has increased because of skyrocketing property rates. All around, there is discontent related to this area. One microblogger named Moxiangshixiaoxian on Sina Weibo expressed some of the anger by saying, “Half of the top 10 wealthiest people are in the real estate sector. They created housing slaves and housing slaves made them [rich].”
Already, the Chinese government has put in place several curbs on property purchases across 40 big cities. This includes Beijing and Shanghai. Additionally, there is a massive effort to create public housing through a 1.3 trillion Chinese yuan (about $200 billion) project. In the meanwhile, the wealthiest Chinese individuals will be looking to increase their incomes further, with or without the property curbs.
Via: The Wall Street Journal