China's Rich Get Even Richer

The poor might be less poor, but still not catching up to the rich

A quick follow-up to yesterday's blog post about Ted Hui Chi-fung's financial predicament -- suddenly -- on a Sunday -- HSBC unfroze his bank account and that of his family and the latest report is that they have moved their money elsewhere.

However, as many have pointed out on social media, the trust in the bank has broken, making them wonder how safe their money is.

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China announced late last month that it has eradicated extreme poverty, a goal President Xi Jinping had pledged in 2015, to complete this year.

832 counties are not in extreme poverty anymore

He made it in the nick of time on November 23, with the 832 counties that were identified as extremely poor are not in dire straits.

However, Caixin reports this does not mean these counties are completely poverty-free. 

"Because the policies are based on raising average incomes, the results often smooth over the circumstances of individual families or communities that continue to live in penury."

Meanwhile on the other end of the spectrum, China's rich have gotten much richer thanks to the coronavirus pandemic, according to lists compiled by Forbes and Hurun Report.

"The world has never seen wealth created at this speed before," said Rupert Hoogewerf, founder of Hurun Report that tracks China's richest.

Nongfu owner Zhong is US$52billion richer

Forbes reports China's 400 richest people now have a total wealth of US$2.11 trillion, a 64 percent surge from US$1.29 trillion last year.

By comparison, America's 400 richest are now worth US$3.2 trillion, only 8.2 percent more than a year ago, according to Forbes numbers.

How China's rich became many times more richer is thanks to IPOs and stock market jumps. Other factors are post-epidemic economic recovery, and fast-booming digital and technology industries. 

One company that profited from its IPO is Nongfu, the water bottle brand. When it went public in Hong Kong in September, founder Zhong Shanhan became US$52 billion richer, which made him the third richest in the country.

The pandemic resulted in a surge in sales in the e-commerce and healthcare industries. Wang Xing, founder of food delivery company Meituan, quadrupled his wealth to US$25 billion. 

Meanwhile Chongqing-based vaccine producer Zhifei saw the wealth of its chairman Jiang Rensheng almost triple, after Chinese regulators approved human trials of the company's Covid-19 vaccine.

Li of Winner Medical prospered during pandemic

And Li Jianquan, the head of Winner Medical that makes PPE and face masks, saw his wealth grow a staggering 11-fold to US$5.6 billion.

Not only those areas are doing well, but also the automotive industry, such as electric vehicles and autonomous driving companies.

Electric vehicle or EV startup Xpeng's IPO in New York this summer helped its founder He Xiaopeng grow his wealth by 80 percent to US$6.6 billion.

And China's biggest lithium battery producer CATL's head, Zeng Yuqun, tripled his wealth to US$17.6 billion this year.

So while Xi met his goal to lift 832 counties out of extreme poverty, that doesn't mean the wealth gap has narrowed significantly...

Fact of the Day: China has the Most Property Billionaires

Hui Ka-yan of Evergrande is the richest property billionaire in China

Perhaps not surprisingly, China has the largest number of property billionaires thanks to three decades of economic growth and people's pursuit of buying a home.

According to the 2019 Hurun Global Real Estate Rich List, China has 108 US dollar billionaires out of 239 around the world, while the United States has 26, the UK 17 and Hong Kong 25.

Li Ka-shing is among the top property tycoons in Hong Kong

China's economic development has fueled the boom of people leaving the countrysides and moving to the cities looking for work, which surged demand for housing.

"The urbanization mega trend in China has driven the biggest wealth explosion in the history of the world, with the result that most of the world's largest real estate developers today come from China," said Rupert Hoogewerf, chairman and chief researcher of the Hurun Report.

Housing used to be provided by the state during the early days of the Communist Party's centrally controlled planned economy. Private housing only emerged two decades ago as the government experimented with capitalism to allow homes to be sold for profit, with the very first land sale taking place in 1987.

Many of the biggest Chinese developers today -- including Country Garden Holdings, China Vanke Group, China Evergrande and Wanda Group -- owe their establishment to the economic reforms of the 1980s and 1990s.

Another Hong Kong property tycoon is Lee Shau-kee

Seven of the world's top 10 property tycoons are Chinese, the wealthiest is Evergrande's chairman, Hui Ka-yan, who is also known as Xu Jiayin in his native Hunan province, with an estimated net worth of 250 billion yuan (US$37 billion).

Hong Kong has 25 billionaires, including Li Ka-shing and Lee Shau-kee. Shenzhen has 17 billionaires, and Beijing has 15, according to the Hurun Report.

Chinese Super Travelers Conquer Poles

Two Chinese tourists pose for pictures on Antarctica

When we talk about travel, someone always mentions mainland Chinese tourists. And these days it looks like they have pretty much conquered the entire planet.

More of them -- well the wealthy ones -- are going to far-flung locations like the Arctic and the Antarctic. There were only 99 Chinese tourists who visited the Antarctic in 2005-2006, but the number has risen to 3,042 in 2014-2015, according to the International Association of Antarctic Tour Operators (IAATO).

One of them was Zhang Mengying, a 31-year-old manager from Guangzhou, who had always wanted to visit the Antarctic, the Arctic and the equator.

She took a more than 30-hour flight from Hong Kong to Buenos Aires, transited in Dubai and Rio Janeiro. After a night's rest, she took another flight to the Argentinian town of Ushuaia, the southernmost tip of South America to embark on a week-long cruise of the Antarctic.

"The most impressive thing was the impact it had on my soul," Zhang said. "Seeing the magnificent, breathtaking beautiful scenery and animals around me, I couldn't help thinking that nature was so great that all big and small disputes in our society were meaningless."

The trip also made her more conscious about global warming, but traveling such far distances surely doesn't help the carbon footprint situation...

A pair of penguins captivate some Chinese tourists

Apparently trips to the North and South Poles make up one-third of tours Chinese "super travelers" took last year.

The Hurun Chinese Luxury Traveller report polled 291 such travelers, defining them as those with at least 10 million yuan and had spent at least US$30,000 on travel in the past 12 months.

"The recent popularity of Antarctica with the Chinese luxury traveler shows how much experiential travel is now on the cards," said Hurun Report chairman Rupert Hoogewerf.

Based on travel numbers, to the Antarctic, China is ranked fourth, after the United States, Australia, and the UK.

Charles Wang, in charge of tours to the Antarctic and the Arctic for HH Travel, an upmarket brand for travel website ctrip.com, says, "Over the last two to three years, our Antarctic clients have been doubling by the year.

"One interesting phenomenon is that in the past, only entrepreneurs, gold-collar workers and retirees went to the Antarctic. But now, the tourists are becoming younger," he said.

HH Travel offers two trips: a 12-day trip to the Antarctic Peninsula for almost 200,000 yuan ($32,221), and a more than 20-day trip to the Falkland Islands and South Georgia Island for 300,000 yuan ($48,331).

Isn't it cold taking wedding photos in the Antarctic?

And how do Chinese tourists behave on these trips?

There have been reports of them charging at groups of penguins, chasing them or getting to close to take pictures. Some even take wedding photos there...

Beijing retiree Yang Yuan, 50, went to the Antarctic in January. "I was stunned by the pure scenery and was moved by the service of my American cruise operator, who spared no effort in protecting the environment," she said.

While it's great to have the Chinese appreciate practically pristine environments, do they understand the importance of protecting them as much as possible, wherever you live?

Company Holiday China Style

Li Jinyuan has made a name for himself treating over 6,000 staff to France

A few days ago a Chinese billionaire and half his workforce of 6,400 people went on a massive incentive trip with him to France.

Talk about a logistical challenge in booking flights, hotels and coaches for several thousand people to tour around Paris and Nice.

Li Jinyuan, founder and chairman of Tiens Group got a lot of attention from local and overseas media for not only treating so many employees at once to celebrate the company's 20th anniversary, but also making them spell out "Tiens' dream is nice in the Cote d'Azur" for the Guinness Book of World Records as the longest human-made phrase.

Spelling out a message using 6,400 people to make letters

Some critics claimed Li was just getting attention for himself, showing off his wealth, and using the trip to push his employees to work harder. Isn't that what incentive trips are about?

Tiens Group makes its money in direct selling, moving 11.5 billion yuan last year in health care, skincare, and household products in China and other countries.

It was estimated the massive group spent HK$113 million on the four-day trip to Paris and Nice. Some employees showed off their purchases -- around 13 million euros -- that included lots of luxury name brand goods.

Li claimed his staff were well behaved on their free holiday, helping to improve the image of mainland tourists abroad. He must have given them a lecture about this before they went on the trip.

And how did Li amass his riches to be ranked 24th on the Hurun China rich list with a personal fortune of 35 billion yuan?

Staff seemed to enjoy their free trip and the shopping too

He left school at an early age and began working in an oil field at 14 years of age. He made money by selling clothing, audio recorders and grain during his free time.

Then Li moved to property, but got out after the government started implementing tightening measures, and so he started manufacturing his own calcium supplement and selling them.

His company is ranked 7th in direct sales in terms of sales on the mainland, following such competitors as Amway of the United States, Malaysia's Perfect China, and Infinitus of Hong Kong.

Fact of the Day: Get Rich is Glorious... then Emigrate

Back in 1992, then paramount leader Deng Xiaoping made his famous southern tour visiting Shenzhen, Guangzhou and Zhuhai, where he reportedly said, "To get rich is glorious!" (致富光荣! zhi4fu4guang1rong2).

And millions of people in China took this literally, creatively finding ways to make their wealth.

But now that the uber rich have made their money, they want their kids to get the heck out of motherland.

According to the Hurun Research Institute based in Shanghai, about 80 percent of mainland tycoons want their children to study abroad.

This compares to 1 percent in Japan and 5 percent in France.

Of the Chinese tycoons surveyed, 30 percent want to send their brood to the UK for primary education, while 36 percent want their children to go to the United States for university.

Sounds like they don't mind their kids having a mixed-up British-American accent...

The report added overseas education was the main reason why tycoons wanted to emigrate.

Sounds like lots of money flowing out of China, apparently for better education...

The report doesn't ask if the tycoons want their children to come back to China after their studies, but the results of that question would also be very telling...