China’s ranks of the super-rich has been dealt a severe below thanks to the country’s stock market meltdown. According to wealth research firm Hurun, the number of billionaires in Greater China has shrunk to just 658 from 819 previously after last year’s epic stock market crash--one of the worst in recent memory.
Panic selling across markets in Asia has rocked the region’s stock markets, with the recent slowdown in manufacturing and commodities as well as ongoing trade tensions with the US being behind the Chinese malaise. The benchmark Shanghai Composite Index finished the year 24.6 lower while the Shenzhen Composite cratered 33.25 percent.
Analysts though expect economic growth to bottom out later this year with the Shanghai Composite index up nearly 14 percent in February alone. The figures provided by the Hurun report are a measure of individual wealth as of January 31, meaning the impact of the February rebound has not been factored in. Optimism about a trade deal being reached with the US as well as hopes of more stimulus measures by Beijing have helped fuel the turnaround.
Despite now having 161 billionaires less, Hurun claims that China still remains home to the largest number of billionaires with the United States’ count of 584 being second largest after 13 more billionaires joined the rarefied club. The report though seems to contradict the 2018 edition of the UBS and the PwC's Billionaires Report which puts the number of billionaires in Greater China (including Taiwan and Hong Kong) at 475 vs. 585 in the US. Related: Scientists Take Rare Look Inside 'Wire Gold' Specimen
Anyway, that’s a sharp contrast to the year before when China was minting two billionaires every week. China’s billionaire class outclassed everybody else in 2017 after growing its total wealth nearly 40 percent compared to 12 percent in the American continent and 19 percent in Europe.
Among the biggest losers last year, were leaders of large companies, including Ma Huateng, CEO of Tencent Holdings, who saw his fortune slump 19 percent to $38 billion after Tencent shares tanked following a freeze of approvals by the Beijing government for many of its money-making games. Once China’s richest man, Wang Jianlin saw his net worth continue to slip after plunging 37 percent to $17 billion. The founder of Dalian Wanda Group, China's largest real estate development company, has been more focused on selling off assets from his giant conglomerate.
Interestingly, some Chinese billionaires thrived amid the turmoil. Jack Ma, chairman of giant e-commerce company Alibaba Inc. saw his fortune rise more than 20 percent to $39 billion making him China’s richest man. Ma’s net worth was helped along by a sharp increase in the value online payments company, Ant Financial, making it more valuable than Goldman Sachs.
Alibaba shares are up nearly 35 percent in the year-to-date, and Jack Ma’s 7 percent stake has no doubt swollen by several billions of dollars more.
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Source: CNN Money
It’s interesting to note that despite the stock market setback, China still managed to bring more new faces to the vaulted club than any other country in the world.
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A series of big Chinese IPOs has catapulted several new names to the ranks of the super-rich. Zhang Yong, the owner of Chinese hot pot chain, Haidilao, has become the world’s richest restaurant owner after his company went public last year. Zhang is now worth an estimated $8.8 billion.
Yet another name to join the neo-rich is Zhang Yiming, founder of internet startup ByteDance. The company behind popular social media apps such as TikTok is valued at $75 billion.
Over the past 40 years, billionaires have driven almost 80 percent of the most important innovations. Approximately 70 percent of these innovations are technology-related with 80 percent of the companies behind them based in the Americas and 20 percent in APAC.
Until last year’s stock market crash, Shenzen was challenging Silicon Valley as the vanguard of the fourth industrial revolution with 50 unicorns produced in China vs. 62 in the US.
By Alex Kimani for Safehaven.com