FACE OF AN ECONOMY: Billionaires in China, their politics and their meetings

A Journal of People report

Billionaires in China are not weak, neither in terms of capital nor in terms of politics. The billionaires there in China, have their agenda, and meetings.

A CNBC.com report said:

In Zhengzhou, China’s heartland, in the capital of its Henan province, some of China’s most powerful leaders would be meeting. The participants in the meeting were not the political elite that run the country for decades. The participants are a new crop of leaders from the private sector.

The April 23, 2017 datelined report said:

“This city, near corn and wheat fields, is hosting an annual meeting from the China Entrepreneur Club. That’s an invite-only group composed of 55 Chinese billionaires, at last count. In other words, they’re the richest — and among the most influential — people in a country that’s already minting millionaires monthly.”

The report by Martin Soong said:

These China’s entrepreneurs “aren’t just titans of industry, but also technology, energy, finance and retail. In many ways, they are China’s new economy.”

The “Chinese billionaires amass in the country’s heartland” headlined report said:

“How they’ve succeeded, mostly despite the Communist government, is a major and under-appreciated part of the story of China’s transformation over the past 35 years.

“In fact, even before the Chinese government officially acknowledged the benefits of private companies, hundreds of thousands of businesses had already begun. A handful of those have become international giants.”

It said:

“Huawei is now one of the largest telecommunications equipment makers in the world, but it started by importing used gear from the telephone exchange in Hong Kong. “The company now known as Lenovo, the world’s top PC-maker by market share, started by selling televisions imported into China. Geely, now one of China’s biggest carmakers, started by selling parts for refrigerators.

“The people behind those names are China’s first generation of entrepreneurs. The second generation came about in the 1990s, and the country’s third crop of entrepreneurs includes people like Alibaba’s Jack Ma, and Tencent’s Pony Ma (no relation), who are now the focus of most of the Western world’s attention. And China is already churning out a new slew of tech titans in the making.”

The report said:

“By some measures, China’s private sector now accounts for two thirds of its economy. Entrepreneurs, not politicians, are now the ones driving the long-sought economic rebalancing away from a dependence on manufacturing and exports and more toward services and consumption.

“But one of the major questions about China’s future is what the dynamic will be like between entrepreneurs and state-owned enterprises. So far, Beijing has largely treated private success benignly because the biggest stars, like Alibaba, are more valuable to the national cause without official direction or interference. Those companies are flying China’s flag, in an increasingly international capacity, more effectively than any state campaign or directive could ever hope to achieve.

“But the state and its companies still comprise a full third of China’s economy, and when state-owned enterprises begin to get crowded out, there will likely be tension.

“Officially, the government hasn’t opened up strategic sectors, including finance, to private players. In reality, though, firms like Tencent through it’s almost ubiquitous WeChat messaging platform have already moved far ahead of China’s stodgy and debt-laden state banking system. Millions of Chinese pay their utility bills, buy movie tickets, order delivery for dinner and even do their banking on WeChat.”

The CNBC.com report said:

“China’s lumbering state banks are trying to catch up, but are already several years late to the game — the private sector is where the innovation is happening.”

Another CNBC.com report by Sophia Yan said:

““Want to rub elbows with the rich? Go to China, where the country’s parliament could pass for an elite club of the world’s richest, where about 100 delegates are U.S. dollar billionaires.

“They made their fortune in everything from property to energy, according to data from the Hurun Report, which publishes the China Rich List. A bunch of tech entrepreneurs sit at the top of the list, including Pony Ma of Tencent, Robin Li of Baidu and Lei Jun of Xiaomi.

“The names are among delegates gathering for their annual meeting in Beijing starting on Friday, a roughly weeklong affair that’s big on posturing, but small on legislating. Delegates always vote to approve proposals from the ruling Communist Party.”

The “China’s parliament has about 100 billionaires, according to data from the Hurun Report” headlined report said:

“Here’s another fun fact: The richest 209 parliament delegates are each worth more than 2 billion yuan ($300 million) – their combined wealth is equivalent to the annual GDPs of Belgium and Sweden, using World Bank figures on GDP for those countries.

“By comparison, the U.S. doesn’t have a single billionaire in Congress. The wealthiest member, California Republican Darrell Issa, is worth around $440 million, according to the Center for Responsive Politics.

“President Donald Trump claims he is a billionaire, though he has refused to release his income taxes to prove it – breaking with a practice followed by U.S. leaders since Richard Nixon.”

The March 2, 2017 datelined report said:

“Still, China’s parliament – made up of the National People’s Congress and the Chinese People’s Political Consultative Conference – includes delegates from a wide variety of backgrounds including those who benefited handsomely as China’s economy has grown into the world’s second largest.

“But there’s another reason to show up – these sessions of China’s “rubber stamp” parliament are a chance to see and be seen. In a country where business and commerce are tightly restricted, a chance to rub elbows with top Communist Party brass could mean the difference between boom and bust.”

It added:

“In 2015, China officially became home to the world’s most number of billionaires, surpassing the U.S., according to Hurun. At one point last year, China was creating a new billionaire nearly every week, based on an analysis by PricewaterhouseCoopers.”

A Reuters report datelined March 2, 2017 said:

“The fortunes of the richest 100 members of China’s parliament and its advisory body – all dollar billionaires – grew about 64% in the four years since Xi Jinping rose to power, according to data from an organization tracking wealth in China.

“Xi has overseen a crackdown on corruption and decadence, and made the fight against poverty a top priority after becoming president in 2013.

“Since then, however, the wealth of the upper crust in the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), tracked by the Shanghai-based Hurun Report, has grown faster than the wider economy, the stock market, home prices and wages.”

It said:

“The NPC and CPPCC start their annual sessions in Beijing on Friday. While their membership cuts across society, this year 209 delegates – about 4% of the total – have been identified by Hurun as each being worth 2 billion yuan ($290.7 million) or more.

“Their combined wealth is close to the GDP of Belgium, totaling nearly 3.5 trillion yuan, or more than $507 billion.

“And over half of them are dollar billionaires. According to Hurun‘s estimates, the top 100 are worth a combined 3 trillion yuan this year, up 64% from 1.84 trillion yuan in 2013.

“That represents an average annual increase in their wealth of 13% over the four year period from 2013-2016, compared with economic growth averaging 7.2%, an average rise of 7% in the CSI300 stock index, and an average 5% increase in home prices over the same period.”

The “China’s Billionaire Lawmakers Keep Getting Richer and Richer” headlined report said:

“Wage data is less up to date, but for the three years from 2013 to 2015 annual wage growth roughly averaged 9%.

“All of the super-rich in parliament or its advisory body are in business, rather than career bureaucrats. Among them are Hong Kong businessman Victor Lee, Pony Ma of tech giant Tencent Holdings, and Robin Li of Baidu.

“Rupert Hoogewerf, founder and publisher of Hurun Report, notes that the companies represented by the wealthy lawmakers have had a big impact in terms of taxes and employment.

“‘Having these stakeholders as advisers to the government I can understand makes a lot of sense,’ he said.”

The report said:

“While all Chinese over the age of 18 are technically allowed to vote for delegates and stand for election to the NPC, most delegates are hand-picked by local level officials.

“The presence of rich businessmen in parliament and its advisory panel is a calculated move by the ruling Communist Party, said Rory Truex, an assistant professor at Princeton.

“‘By giving the extremely wealthy a position in parliament that kind of helps ensure their loyalty and it gives them a vested interest in the success of the party,’ he said.”

It added:

“The entrepreneurs benefit, too, according to Truex, who published a paper in 2014 showing businesses that had a CEO in 11th NPC (2008-2012) enjoyed a ‘reputation boost’ that increased operating profits by 3-4%. He has not analyzed data for the current session of parliament.

“Victor Shih, a scholar of elite Chinese politics at the University of California San Diego, said businessmen valued seats at local and national levels because ‘it affords them a certain degree of political protection.’”

China accounted for the greatest number of new entrants on Forbes‘ annual ranking of the world’s billionaires, with 76 billionaires making it to the ranking for the first time, the business magazine announced on Monday (March 20). A total of 2,043 billionaires made the list this year, 233 more compared to 2016 – the biggest jump in 31 years. They have a collective net worth of US$7.67 trillion, up from US$6.48 trillion in 2016, Forbes said.

While the U. S. continues to be the country with the single greatest number of billionaires – 565 of them – China is catching up with 319.

Earlier, a January 10, 2017 datelined Bloomberg News report said:

China’s president Xi Jinping led an entourage of business executives to the World Economic Forum in the Alpine resort town of Davos.

The “Xi to Lead Delegation of China’s Wealthiest Executives to Davos” headlined report said:

Executives accompanying Xi to the meeting included Alibaba Group Holding Ltd. founder Jack Ma, Dalian Wanda Group Co. chairman Wang Jianlin and Baidu Inc. president Zhang Yaqin. Huawei Technologies Co. chairwoman Sun Yafang, China Telecom Corp. chairman Yang Jie, and China Poly Group Corp. chairman Xu Niansha will also attend. Ma and Wang are China’s two richest people, with net worths of $34.5 billion and $30.5 billion, respectively, according to the Bloomberg Billionaires Index. They rank 15th and 21st globally.

A May 2, 2017 datelined  ipolitics report said:

“A private meeting between Prime Minister Justin Trudeau and a dozen major Chinese business leaders was intended originally to be public before the Prime Minister’s Office reduced media access to a photo-op, documents show.”

The “PMO blocked media access to meeting with Chinese billionaires: documents” headlined report by James Munson said:

“The China Entrepreneur Club (CEC), a group of investors whose companies took in US$450 billion in annual gross income in 2015, preferred granting media access to the entirety of an October 18, 2016 event near Ottawa with Trudeau — but those plans fell through after an intervention from the PMO, emails between public servants discussing preparations for the meeting show.”

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