Friday, April 13, 2007

Billionaires bloom in China

The list of richest people in the world of 2007 declared by Forbes includes 25 from China. Though, the Chinese rich still trail their counterparts in India.

On 28th March, a private banking venture between Bank of China and equity partner Royal Scotland (RBS) was launched to target the wealthy Chinese with more than $1m of disposable assets to invest, according to Reuters.

The new venture with operate out of two branches in Beijing and Shanghai and continue to spread to other big cities.

Forbes announced 25 Chinese billionaires out of the 964 richest people in the world in 2007. Among these 25 people, there are 13 of them joining the world’s billionaire club for the first time.

According to Forbes’ report, the richest person in China now is Yan Cheung, the founder of Nine Dragons Paper Holdings. This woman turned waster paper into her boxing empire, says China Daily. She is now ranked 390th in the world’s richest people list.

A Merrill Lynch/Capgemini report estimated that China had 320,000 dollar millionaires in 2005, 6.8 percent more than the year before, with combined wealth of $1.59 trillion.

Bank of China President Li Lihui said the ranks of the rich would swell in tandem with the economy's expansion, as saying by Reuters.

China Daily predicts not only famous car brand names, jewelry companies, etc. but also commercial jet manufacturers are planning to flock into this country to target its bulging billionaires population.

India's dominance in the billionaires club shocks China

Above is the top story on The Hindu in mid-March, the national paper in India, saying that Indians topping the Forbes’ list of Asian billionaires, replacing the Japanese, have flabbergasted the wealthy Chinese.

Forbes 2007 listing of billionaires shows there are now 36 Indian billionaires. Asia added 54 new billionaires in the last one year, 14 of which were from India.

The Hindu says ever fourth new Asian billionaire was from India. The BBC says steel magnate Lakshmi Mittal leads the Indian billionaire club, with a net work of $32bn. This man is the fifth richest person in the world, according to the magazine.

China and Hong Kong together have a total of 41 billionaires, according to the Forbes list.

‘The nail that sticks up gets hammered’

The question is: Do the Chinese rich really get shocked by the fact they are outranked by their Indian counterparts?

The New York Times says that there is a popular common saying in China ‘the nail that sticks up gets hammered’. This saying is also popular in Japan and other Asian countries. ‘No one wants to be that nail and talk about their business’.

China Daily points out that most of billionaires in China involve in real estates. Perhaps there is good reason for not publicizing assets since the Chinese real estate industry has been dogged by scandal of illegal land grabs, corruption, government bribery, the New York Times reports. This also means the Chinese rich hardly feel comfortable when being spotted by the media as they could end up paying more tax or enjoy some extra-needed attention.

Since 2005, Reuters says that real estate has been the industry that brings about $130bn of annual sale, making itself one of the biggest engines in the Chinese economy.

More billionaires – brighter prospects?

The February edition of Fortune magazines showed that about half of the people starving in the world are living in India, more than 5.70 million population is infected with AIDS, only 61 per cent of the adults are educated, which is no better than Rwanda.

The Telegraph says that the rich-poor gap in China is world’s worst.

A report by the Chinese Academy of Social Sciences says almost half the wealth gap in China was accounted for by the urban-rural divide. And there was also a growing gap with urban areas, between the ordinary working class and the new middle and super-rich classes.

Does the increasing number of billionaires in China or India offer a brighter prospect for the people in their countries?

An answer for the time being, the Asian rich can contribute to the world’s richest list.

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