Should we envy China’s army of billionaires?
The country now has more than America and India combined
China — a Communist state — has more billionaires than America, land of the free. The latest figures come from the Hurun Global Rich List — which is a ranking of the world’s dollar billionaires.
According to the 2022 list there are 1,133 billionaires in the People’s Republic compared to 716 in the US. India was in third place with 215 billionaires and the UK fourth with 150.
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Though China first overtook America back in 2016, the margin has now grown to embarrassing proportions. On current trends it can only grow further. The number of new Chinese billionaires created over the last year (235) is nearly quadruple the number of new American billionaires (63).
A ranking of global cities by number of resident billionaires puts the Chinese cities of Beijing, Shanghai and Shenzhen in first, second and third place respectively. New York comes in fourth and London fifth.
So, is this further evidence that the Chinese version of capitalism is outstripping the western original? A few points to consider: firstly, we should never forget that more than half of humanity lives in the three regions of East Asia, South Asia and South-East Asia. This is the most under-appreciated important fact about the world today. As China, India and their neighbours catch-up with the West, we should expect — and, indeed, hope — that Asia becomes the focal point of the global economy. After all, the only way in which this doesn’t happen is if the majority of the world’s people stay poor.
Secondly, the number of rich individuals is only one measure of super-wealth. While China has more billionaires, the combined wealth of their American counterparts remains greater. There are no trillionaires anywhere in the world yet, but America dominates the list of people with more than $100 billion to their names. If the wealth of these centi-billionaires were more evenly distributed then there’d be room for a larger number of ordinary billionaires — but perhaps this isn’t a top social justice priority.
Thirdly, billionaires tend to be created by the founding and rapid expansion of new industries. China, which is catching up with more than a century of American growth in just a few decades, is an economy on fast forward. This provides more get-rich-quick opportunities than a mature western economy.
Finally, we have to think about the nature of these rapidly expanding industries. China’s super-wealthy tend to be property developers and industrialists. By spamming tower blocks and polluting factories across a nation of more than a billion people, they’ve certainly generated high levels of economic growth — which is why the Chinese government has allowed them to get rich in the process.
The long-term test, though, is sustainability — and not just in the environmental sphere. Enduring economic growth depends upon genuine innovation. If Chinese entrepreneurs start getting rich by creating industries that the West finds itself copying, then we’ll have something to envy.
What China’s super-wealthy will be all too aware of, is the CCP will undoubtedly move against them at some point in the future sooner or later, with the aim of simply seizing their assets. This will likely happen when China’s growth party music stops and hard times start for China’s hundreds of millions economically.
When I said ‘simply’ earlier, well, China is a single party authotarian state, so that stuff would of course be accompanied by the authorities coming down on you with no recourse. If the CCP wants to do a deal with you instead, you would get the kind of story of what happened to Fan Bingbing – like Don Corleone they will make you an offer you can’t refuse. If you have annoyed the CCP or they perceive you as a threat, you will get trials for tax fraud, sedition etc, followed by a rapid turnaround of executions.
All this means, the Chinese super-rich, who are not stupid, will walk a tightrope while they get rich in China, all the while attempting to ferret away wealth abroad and plan escape chutes to the West for when the times turn nasty. The CCP will of course be all too aware of this, and will attempt to demonstrate to the super-rich that their reach is long and wide, and they can be got to anywhere in the world if they betray or steal from China. So expect Skripal type stuff with increasing frequency.
The one exception is the tech oriented super-rich who hold the strongest cards and I suspect will feel they can counter the CCP. So I fully expect a brutal power struggle in China in the next few years between the CCP and the Chinese tech giants.
Not so sure I agree with you regarding the tech billionaires being safer from the CCP. Witness Jack Ma (above) who was disappeared by them some time ago for wrong-think.
Yes Jack Ma got into trouble for criticising Chinese banking regulations, and was slapped down by Xi who forced the Ant Group to withdraw it’s multi billion dollar IPO. Since then Ma has wisely kept a very low profile. So yes the CCP is not the type of entity to give way in power without a vicious fight, but I nevertheless feel it will come under challenge from the tech sector in China which has a somewhat different agenda, so things will get tasty, And although by no means a given, in the longer run I suspect the tech giants will win out over the CCP.
I don’t wish to sound snarky but is the number of billionaires really a measure of economic and social health?
No… the number of LGBT+ people, global warning sandaloid zealots and multi racial and inclusive people is FAR more important….
When Capitalism first got going in China, billionaires were colour-coded – red, green, blue, white, and black. “Red” – for those who made money from party connections, “Green” for army connections, “Blue” for customs connections, “White” for those who made money from drugs, and “black” for the black economy. Fast-forward to today, and yes, China is still minting billionaires, as is America. But there are only so many ways to innovate and create new wealth. The other ways to produce billionaires involve corruption and rent-seeking. And the aim of many innovators is to establish a new monopoly and capture rents. It’s not a very sustainable way to build an economy.
Most oft ignored in economic debate and absent from media comment, is power of China, India and other Far East countries pensions and savings volumes. ‘ n’ million people across the zone come into work for the first time, and add to the vast numbers already saving via workplace pensions, life insurance and mutual funds. Not only do these weekly/monthly trillions invest in European and other global equity markets, those related to life and pensions actuarial value on a 30 to 50 year basis are heavily invested in Government bonds, not least US…… So when journalists and politicians blithely drone on about Government borrowing, they ignore, or are ( much more likely) plainly ignorant of the importance and ‘ mechanism” of the above….. which is the backbone to the future Asian financial supremacy, that is not based only on simple GNP/GDP growth numbers.
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