The US has more billionaires than any other country: 415 by the last count of Forbes magazine. No. 2, and closing fast? China.
A year ago, there were 15 billionaires in China. Now, there are more than 100, according to the widely watched Hurun Report, and 66 according to Forbes.
Unlike America’s rich, China’s are hardly famous, even here. Bill Gates and Warren E. Buffett are known around the world. But Yang Huiyan and Robin Li? Yet, who they are, and what they decide to do—or are allowed to do—with their money and newfound influence will have political and economic consequences in China and probably far beyond, analysts say.
Jack Ma (left), founder and chairman of Alibaba.com, and Ronald Arculli, chairman of the Hong Kong Stock Exchange, hold up a giant portrait of the 18 founders of Alibaba at the exchange
“They could start buying companies in the US,” Chang Chun, an economist at the China Europe International Business School in Shanghai, said of China’s new rich. “They have so much influence.”
Aptly, China’s new billionaires are building their staggering wealth on the backs of the richest companies you have never heard of.
Thanks to the capitalist stock mania sweeping the communist mainland, Chinese private and state-owned companies issuing stock for the first time are becoming the most valuable companies in the world—sometimes overnight. On Monday, the first day the state-owned energy firm PetroChina Co. Ltd listed shares on the Shanghai Stock Exchange, its market valuation ran up to more than $1 trillion (Rs39.3 trillion), topping that of any company in history.
Analysts are sceptical about the way China’s stocks are valued, particularly those such as PetroChina with huge amounts of untradable government shares. But on paper, at least, it has dethroned Exxon Mobil Corp. as the most valuable company in the world.
Similarly, China Mobile Ltd is the world’s most valuable telecommunications company. The state-owned Industrial and Commercial Bank of China, a commercial bank that was nearly insolvent a decade ago, is worth more than Citigroup.
And when Country Garden, a southern China real estate company, went public in April, its initial public offering (IPO) was bigger than Google’s.
On Tuesday, another newcomer, Alibaba.com, one of China’s biggest Internet companies, had another blockbuster stock offering, raising nearly as much as Google, and soaring 193% on its first day of trading.
But, many analysts argue that there is nothing underlying the skyrocketing values, or that the obscure finances of the companies make it impossible to know their true value. And, if China’s stock market is a bubble, the new billionaires will disappear as quickly as they rose. “A lot of people are surprised at how fast this has happened,” said Jing Ulrich, an analyst at JPMorgan Chase. “But this is the power of the capital markets. A lot of people’s wealth is based on newly listed companies.”