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China's Richest 50, by Rupert Hoogewerf (28/02/2001)

This talk was based on the findings of research undertaken by the speaker in drawing up the first ever list of the richest people in China, published in September 2000 in Forbes Magazine. This publication created quite a stir both within China itself and abroad, highlighting the paradox at the centre of China's role in the modern world, that of the ideologically Communist country where in reality Capitalism is king.

Mr Hoogewerf graduated from the University of Durham with a degree in Chinese and Japanese. He then spent 7 years working with Arthur Andersons, first training in England and then working out in Shanghai. He left his position with them 2 years ago and set out as a freelance journalist, his biggest project to date being the Forbes China list.

Forbes Magazine and the lists of the richest people around the world that it produces provide an interesting point of comparison between nations. Of the top fifty most wealthy people in Britain 30% of their wealth is inherited, in America the figure is 25%, whilst in China the figure is 0%! Thus all the people described in the China list have self amassed fortunes. So the questions arises as to how these fortunes have been built up in the last 20 odd years since reform in China began in earnest.

Mr Hoogewerf listed five points as key to all of the individual cases that he has covered. Firstly, raw capitalism is the driving force in each case. Secondly, each of the people has shown vision in their decision making to capitalise on the rapid changes taking place within China and the opportunities they present. Thirdly, virtually all of the people have at some point received government funding. Fourthly they have all been politically savvy, working around and with a regime which is not always friendly to free enterprise. Finally direct government involvement has played a major role in the creation of many of these fortunes.

All these people have built up their fortunes in the last twenty years, within which time such phenomena as private jet planes, ferraris and even soccer teams have gone from being inconceivable to being reality.

The seven individuals that Mr Hoogewerf described in a little more detail show the rich diversity amongst the top fifty in China, where routes to wealth are as varied as in any other country. To pick on two of them Liu Yongxing and Ren Zhengfei, they show radically different routes to the top Liu Yongxing's wealth grew from seizing on the opportunities presented by Agri-reform in the 1980s, cornering 10% of the market in pig-feed, off the back of which he has moved into the profitable area of buying up and overhauling failing state owned enterprises. Ren Zhengfei's military background officially has not assisted his personal fortune making, but it seems highly likely that he has been able to use his position, in contravention of Chinese law, to build up his hold on the telecommunications market.

These individual cases highlight the role of major political change in allowing the build up of personal fortunes in modern day China. It is also very interesting to note that whilst the accuracy of the list is not doubted, Mr Hoogewerf himself was happy to admit that there are high level members of China's government you have equally profited from the reforms, but who are very eager for this information to be kept secret due to the questionable legality of their actions.

summary by Phil Dorman