SHANGHAI (Reuters) - Growing numbers of China’s rich want to avoid publicizing their wealth, Forbes said, reflecting fears of official scrutiny amid a vast and growing rich-poor divide after several billionaires have ended up in jail.
Rural incomes have been rising more slowly than urban incomes for two decades — a factor that could threaten social stability and the ruling Communist Party’s grip on power in a country where 150 million people still live on just $0.50 a day.
More of the newly rich than in recent years asked to be left out of Forbes Asia’s latest China rich list, said Russell Flannery, a senior editor at the magazine who oversaw the compilation of the list, which was released on Thursday.
“I think it’s a reflection in a bit of a sea change in Chinese society right now,” said Flannery. “...There’s a lot of concern in China about the wealth gap.”
Several once high-flying members of earlier rich lists have ended up in jail, including Huang Guangyu, the founder of Gome Electrical Appliance Holding Ltd, and Shanghai property tycoon Zhou Zhengyi.
CLSA Asia-Pacific Markets in a study released on Thursday estimated that China will account for 60 percent of the rise in high net-worth individuals’ wealth in Asia over the next five years.
The latest rich list pitted stolid industrial muscle against high-tech, with the head of an earth-moving company pipping the co-founder of the nation’s biggest Internet search engine for the top spot.
Liang Wengen, the chairman of Sany Heavy Industry, came in at number one on the Forbes list, a day after the rival Hurun Rich List also gave the top spot to the magnate, whose company makes earth-movers, pile drivers and concrete mixers powering the nation’s urban transformation.
Forbes estimated Liang’s wealth at $9.3 billion.
“This is a remarkable story of people growing up dirt poor in Changsha in Hunan Province, and from one group of people, getting seven of them on the Forbes China Rich List, including four billionaires,” said Flannery.
Along with Liang, three other entrepreneurs associated with Sany are on the rich list: Tang Xiuguo, Mao Zhongwu of Xiang Wenbo. Liang, Mao and Tang were all founders of the company.
Other members of the Forbes top-ten included Liu Yonghao, an agribusiness magnate, and several real estate investors.
Sany’s success partly reflects the rapid growth of China’s high-value added manufacturing sector over the past decade, with exports from makers of pricy machinery and construction equipment advancing faster than low-value goods like toys. Sany is based in Changsha, the capital of Hunan in southern China.
“We’ve seen a structural change in Chinese exports that started several years ago. If you look at the export compound annual growth rate from 2003-2008, you can see that low value goods are not growing fast — usually single digit or at most low teens. High value are growing at 40-50 percent,” said David Lee, a China-based partner with Boston Consulting Group, who specializes in industrial goods.
The company says it has over 60,000 employees and sales revenue of 50 billion yuan last year. Despite the gritty image of earth-moving equipment, the company also says it channels at least 5 percent of that revenue into research and development and has production plants in the United States, Germany, India and Brazil.
Forbes gave the second place to Robin Li, a founder of Baidu, China’s dominant Internet search engine, who the magazine said had personal wealth of about $9.2 billion. Li could have snatched the top spot if it wasn’t for the volatility of share markets in the United States, where Baidu is listed.
All in all, Forbes estimated that China’s crop of billionaires grew from 126 last year to 146 now.
Additional reporting by Don Durfee and Reuters Inisder Television; Writing by Chris Buckley and Muralikumar Anantharaman; Editing by Nick Macfie