China’s rich list tells stories of the GBA’s rise

Last year was the worst in a decade for China’s stock markets. Although many of the country’s highest flyers have recovered this year (so far), there is no escaping the fact that fortunes were reshuffled by the turmoil that gripped stocks in 2018. This much is evident by a “rich report” released by the Shenzhen-based business magazine New Wealth.

To get into China’s Top 500 in 2018, one needed to be less than a USD billionaire – a lot less, in fact: US$650 million, down 30% from 2017. However, if you were from the Greater Bay Area, you were either unaffected – i.e., you lost a bit, but maintained your ranking – or you were likely to have risen through the rankings. Six of the top 10 are from the GBA, including the perennial No 1, Tencent’s Pony Ma.

The business publication has been compiling its Rich List for the past 17 years. What has made it stand out in recent years is that it is seen as an indicator of the development of the country’s private economy. Through the movements of those listed, the chart showcases investment trends and testifies to the achievements of those that seized new opportunities for wealth generation.

The total net fortune of China’s Top 500 wealthiest shrank from US$1.38 trillion to $1.17 trillion in 2018, according to the list. The average personal wealth of those listed fell 15% from $2.77 billion to $2.35 billion.

However, those at the very top were unaffected. Shenzhen’s local boy-made-good, Tencent’s Ma, has held the crown since 2010 with US$32.8 billion. He was followed by “the other Ma”, Huangzhou-based Jack Ma, with a personal wealth of only US$31.9 billion, even though the companies he controls, including Alibaba, Ant Financial and Yunfeng Fund, have a combined market value of US$652.3 billion.

There was only one change in the top 10, the first since the 2008 financial crisis: Zhang Yiming, the founder of Bytedance, one of the world’s most valuable startups and the operator of globally popular video app TikTok, replaced the father/son duo Li Shufu and Li Xingxing of automaker Geely to take 10thposition.

The list also offered some insight in the development of cities and the growth of particular industries in the Greater Bay Area. Guangdong’s reputation as the country’s best place to make a fortune was cemented, as 110 positions in the Top 500 ranking hailed from the province – 103 from the nine mainland cities in the GBA, accounting for 20.6% of the total.

It also pays to dream big when one is young in the GBA: Five of the GBA’s entries on the list are aged under 40.

Shenzhen is the place to be

Shenzhen has long been touted as the private-marketeers’ paradise in China. The list shows why: more than half of the GBA’s total, 57, are based in Shenzhen. Guangzhou can claim just 25, while Foshan has 12 (four from Shunde), Dongguan has six, Zhongshan has three, Zhuhai two, and one each from Huizhou and Jiangmen.

Shenzhen, Guangzhou and Foshan account for six of the Top 10. They are worth a combined US$123.1 billion, or 10.5% of the total net fortune of the list. Besides Ma, the other five are:

Property tycoons Xu Jiayin (#3), the high-profile chairman of Shenzhen-based Evergrande Real Estate Group, and Yang Huiyan (#5), chairwoman of Foshan-based Country Garden Holdings, kept their rankings. Yang also held her position of China’s richest woman, with a net worth of US$17.9 billion. (She inherited this wealth, however, it should be noted, and still has a long way to go, being younger than 40.)

Although Foshan’s He Xiangjian (#6) has retired from home appliance giant Midea Group, his controlling stake kept him in the rankings.

Ding Lei (#7), founder of internet company NetEase, and Wang Wei (#8) of the delivery service company SF Express, rounded out the GBA’s representation in the Top 10.

Strengths in High-end Manufacturing

Real estate remains the place to be for billionaires in the GBA. But times are changing, as TMT (technology, media and telecom), medicine and healthcare, medical devices, electronic components, finance and investment are the industries for faster-growing fortunes.

Indeed, the region’s property tycoons have been making bold bids recently to cross over to other industries. Evergrande’s Xu Jiayin is one of the most conspicuous, having been aggressively venturing into new energy vehicles. Yang Huiyan of Country Garden, meanwhile, has chosen to invest heavily in agriculture and robotics. In July last year, the group established Guangdong Bozhilin Robot Ltd, with plans to invest more than US$11.5 billion to establish a “robot valley” in Foshan’s Shunde district. Its headquarters will occupy 10 square kilometers.

In the TMT sector, which focuses on a light asset model, the GBA shows strength as well, as 22 entrepreneurs from the sector are on the list this year, mainly from Guangzhou and Shenzhen. Also seen as promising is medicine and healthcare, and the medical device industry. Zhuhai’s two richest people exemplify this: BY-Health’s Liang Yunchaoranks 179th   with S$1.79 billion, up 89 places from last year. Dong Fanof Jafron Biomedical also jumped 19 places to 297th with US$1.21 billion.

Overall, the report’s authors note that the GBA has a great advantage in the integrated nature of its high-end manufacturing industries. While not a leader in higher-education institutions, the region has no shortage of entrepreneurial drive and innovative achievers. The GBA leads the country’s technological transformation by remaining open-minded in the process of economic upgrading, the magazine said.

Youth are rising

Among the 103 rich people from the GBA, the youngest is 29-year-old Ji Kaiting, while the oldest is 82-year-old Liang Qingde. More than half of the list are 50-59 years old.

Yang Huiyan of Country Garden is by far the richest youngster, at US$17.9 billion. Ji Kaiting, meanwhile, is the daughter of Logan Property chairman, Ji Haipeng, with a net worth of $5.24 billion held through various family trusts.

The three other GBA youngsters on the list were self-made. Wang Tao, aged 39, of Shenzhen-based drone maker DJI, ranks 101st with US$4.76 billion. Founder of global manufacturer of advanced flexible displays Royole, Liu Zihong, 36, ranks 207th with US$1.59 billion. The founder of space technologies company Kuang-Chi Science, Liu Ruopeng, 36, ranks 490th with US$710 million.

The three graduated from different universities: Hong Kong University of Science and Technology, Tsinghua University and Duke University, respectively. But they all chose to establish their businesses in Shenzhen.

Wang Tao founded DJI in 2006 – today it has a 70% share of the global consumer drone market. Liu Zihong founded Royale in 2012 – today it is valued at US$5 billion and makes the world’s thinnest 0.01mm flexible display. Liu Ruopeng’s Kuang-Chi Science, launched in Shenzhen in 2010, is competitive in the global metamaterial industry and has established offices across 18 countries and regions.

There is one category in which the GBA has some catching up to do, however. Only five women made it into the list. Besides property heiresses Yang Huiyan and Ji Kaiting, the others were Cheng Xue of Foshan Haitian Flavouring & Food Co, Zeng Fangqin of Lingyi iTech Guangdong Co, and Huang Xiaofen of Shenzhen Kinwong. Zeng Fangqin is the only one from Jiangmen. She is worth US$2.89 billion, but dropped 168 places this year after her shares lost nearly half their value in last year’s stock market rout.