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Forty-Nine New Billionaires Grace China’s 2010 Rich List

Oct. 28 – The 2010 Forbes China Rich List, released on Thursday, reveals the entrance of 49 members into the burgeoning ranks of U.S. dollar billionaires in China, raising the total number to 128.

Zong Qinghou, chairman of the beverage giant Wahaha, tops the list with a US$8 billion net worth, up from $4.8 billion last year.

Roughly 30 years after the introduction of Deng Xiaoping’s pro-market policies, China’s economy is grown to become the second largest in the world and the number of U.S. dollar billionaires in China is now second only to that of the United States.

Shenzhen is the country’s largest source of high net worth individuals, boasting 17 billionaires, Beijing is a close second with 15, and Shanghai comes in at third with 10. Nine are below the age of 40, and 11 of China’s billionaires are women.

Interestingly, Forbes reports that a tenth of the 400 richest Chinese have earned their fortune through China’s healthcare sector—a stark contrast from previous years where most wealthy Chinese have earned their money through real estate. Lu Zhiqiang of Oceanwide Construction exemplified this shift, falling 15 spots to number 31 as his net worth shrunk by roughly US$500 million this year to US$2.15 billion.

“China is leading the world in initial public offerings this year, and the big increases in wealth and the number of billionaires on our list this year are closely linked to a large number of successful IPOs by Chinese companies,” explained Forbes Senior Editor Russell Flannery, who compiled the list.

Asia in general has performed well this year. Although the United States has seen its representation among the world’s richest decline slightly, Asia just added 104 billionaire tycoons to the world list.

“The strong entrepreneurial spirit, buoyant stock and asset markets, China’s sustained economic growth, as well as the appreciation of the renminbi, are going to produce an even bigger number of billionaires at a stunning pace in the years to come,” Zhou Jiangong, editor-in-chief of Forbes China, said in a press release.

In addition, opaque accounting practices and the difficulty of correctly valuing unlisted, privately held companies may mean that there are many more billionaires in emerging Asia than the report suggests.

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7 Responses to Forty-Nine New Billionaires Grace China’s 2010 Rich List

  1. ajay says:

    One has to read how Zong Qinghou made his fortune by undercutting his partner Danone. Danone invested in Wahaha by buying 51% stake, but things did not turn out well for Danone. Zong Qinghou started parallel factories to make same stuff made by Wahaha-Danone. Ultimately Danone had to fight in a court and off-course Danone lost. Danone sold stake in the joint at much cheaper price. This is an example of a blatant gangster-ism. Wonder why France politicians did not raise this issue? OR the French are now so sidelined. Was France at mistake here? It is perhaps right time for France to give up permanent UNSC seat. It is now just an another European country with not much of a clout. This shows that Nukes without economy to match for it are not very helpful.
    I assume China is treating Britain, Germany same way? Perhaps these European countries do deserves such treatment. It wont be long before China treats US in similar way. Clock is ticking!

  2. The_Observer says:

    It’s like continual Olympics for China. Faster (computers, railways, development), stronger (diplomacy, economy, research) and higher(education, nutrition, incomes). There are always arguments whether democracy or democracy should be a priority in a country’s development. But when historians write about the last 25 years of China’s development they will state that no other country has done better to re-engineer their economy and society for the better and to raise so many people out of poverty in that period.

  3. The_Observer says:

    “There are always arguments whether democracy or democracy should be a priority… ” should have read as,
    “There are always arguments whether democracy or STABILITY should be a priority…”

  4. Chris Devonshire-Ellis says:

    “opaque accounting practices and the difficulty of correctly valuing unlisted, privately held companies may mean that there are many more billionaires” – personally I would have said “than there should be”.

    The pilfering of state assets and the overvaluing of mainland assets (I’ve seen several mainland companies listed that have included total value of their JV’s assets as belonging to them alone in their IPO prospectus) and dubious business practices makes it hard to sort out the real winners from the guys who got rich by graft.

  5. The_Observer says:

    That last comment of yours is important for investors. China has it’s own rating agency. Does your company buy research from that agency and, if so, does the agency reports always match up with your company’s data on individual Chinese businesses? Thanks

  6. Chris Devonshire-Ellis says:

    @Observer – We don’t buy from ratings agencies. But even better – we conduct investigative audits and often work in conjunction with the Big Four on Chinese businesses wanting to list, so we see what is going on. We also conduct internal audits in India.

    I don’t buy Chinese stocks – but I do buy Indian stocks. Go figure that out – you’re talking to someone who reads the books, and I don’t need ratings agencies to tell me how to read a bottom line or question where the assets are, and whether they really exist. Thanks – Chris

  7. The_Observer says:

    For those that are interested. There are a known 403 billionaires in the USA and probably quite a few more who keep a low (tax) profile.

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