The rich got richer over the past year in China, despite the slowing economy. According to the latest edition of the Hurun Report, this was partly because of the rise of tech entrepreneurs, particularly in the Greater Bay Area.
Although the Hurun Report counted 4% fewer “double billionaires” (those with at least RMB 2 billion in assets), more than half of the 1,819 people on the list saw their assets grow over the past year, while the average wealth increased by 10% to ¥9.8bn, the highest on record.
Moreover, in the 12 months up to August 15, the report shows those at the very top doing well: seven people joined the ranks of those with more than ¥100bn, taking their total to 19. The top 50 jumped by a combined ¥100bn.
Four of the top five were from the GBA. Alibaba’s Jack Ma (from Hangzhou) was first, again, at ¥275bn. Tencent’s Pony Ma was close behind, with his net worth jumping ¥20bn to ¥260bn, followed by Shenzhen-based China Evergrande boss Xu Jiayin, whose wealth shrank by ¥40bn to ¥210bn. Foshan’s He Xiangjian and his son, He Jianfeng, of the home appliance group Midea, came fourth with ¥180bn. Country Garden property heiress Yang Huiyan, also from Foshan, was tied for fifth spot with the husband-wife team of Sun Piaoyang & Zhong Huijuan, pharmaceuticals majors from Jiangsu province.
It was in the composition of the list that the most interesting changes were noted. With 192 new faces altogether, and 21 in the top 100, two entered the list for the first time. They were Lu Zhongfang and Li Yongxin, the mother-son team behind Zhonggong Education, one of the largest public service examination training institutions in China; and Yuan Zheng, of newly listed video conferencing software maker, Zoom.
Other GBA-based companies saw their bosses feature prominently: 405 of the total (22%) are headquartered in Guangdong, while 40 are in Hong Kong.
Grouped by city, Shenzhen (191), Guangzhou (90) and Hong Kong (53), ranked second, fifth and sixth respectively. Of the top 100 richest people, 29 live in the GBA.
Local media asked some experts what made the GBA attractive to rich people. Many pointed to the most obvious reasons, such as that Guangdong has always been at the forefront of Reform and Opening, which is why entrepreneurial-minded people liked to take risks and do business here. Others pointed out the role of the government in fostering industrial upgrading.
Li Yuan, deputy director of the Institute of Enterprise Studies of the Guangdong Academy of Social Sciences, Guangdong has benefitted from having undertaken an active approach to restructuring its economy earlier, especially in Shenzhen. He said the “innovative atmosphere that is bold, open and inclusive” was a great strength.
Other analysts pointed to the rise of the tech industry in the region, citing the Hurun Report as evidence of this: the proportion of the IT industry rose from 10.3% last year to 11.7%, surpassing the finance industry as the third largest source of wealth. Manufacturing is still tops, but it dropped from 26.1% last year to 24.5%. Real estate is still second, accounting for 14.8%, basically the same as last year.
Moreover, in many instances, manufacturing tycoons, and even those in property, were actively engaged in diversifying their groups into tech-related ventures. The nine GBA cities inside Guangdong have already formed an industrial structure that is well-suited to fostering the growth of strategic emerging industries.
This strength is why Hurun launched a new sub-category list this year, representing the bosses of emerging industries: 22 of the list came from IPOs on Shanghai’s STAR Market, the so-called “innovation board”. The growth of this group is even more obvious in the GBA, the report noted, citing the examples of Shenzhen-based biopharm firm Mairui Medical’s Li Xiting, with a wealth of ¥60bn, who jumped from 141st to 40th this year; Zhang Fan, of Shenzhen-based fingerprint identification chipmaker Huiding Technology, ranked 59th with ¥44bn; and He Xiaopeng of Guangzhou-based Xpeng Auto, a new energy vehicle unicorn, ranked 124th with ¥25 billion.
Indeed, some experts believe that the GBA’s advantages in coupling software development with its innate hardware strengths is likely to keep powering the region ahead in wealth generation for many years to come. Feng Xiaoyun, a professor at Jinan University’s School of Economics, cited the masterplan for the GBA’s Science and Technology Innovation Corridor as a reason for optimism about the region’s future. “The proportion of technology-based enterprises in Guangdong will become higher and higher,” he was quoted as saying, citing the number of unicorns based in the region.
Wang Cong, a professor at the School of Economics and Management of the Chinese University of Hong Kong (in Shenzhen), believes that the structure of the technology industry is changing in China, and the biggest opportunities lie ahead for companies based in the GBA. “China’s biggest wave of opportunities to create wealth in the past 10 years is the listing of Internet companies,” he was quoted as saying. “But Internet companies are built on model-innovations that reaped huge dividends from China’s large base of Internet users. China’s next great opportunity is in manufacturing transformation and upgrading. This requires companies that can independently develop and produce core components.”