Yesterday the Hurun Institute published its 17th annual Chinese rich list.
The headline figure is that over the last year, the number of $billionaires has rocketed by 68% to 596. This might mean that China has more billionaires than the USA. The Forbes billionaires list of March 2015 puts the number of USA billionaires at 536, although the figures are not strictly comparable, Forbes’s methodology leads to less Chinese billionaires being identified, placing the number of Chinese (and Hong Kong) billionaires at a lower level at 213 at that time. It would appear the reason for this is that Hurun has a much closer understanding of Chinese wealth than Forbes. Additionally Forbes tends to estimate Chinese wealth at a lower level and has rules which excludes those whose wealth is derived from power within the state apparatus both of which may also contribute to this discrepancy. If we include those from “Greater China” (adding in Taiwan, Hong Kong and Macau) the total number of billionaires Hurun identifies rises even further to 719.
US billionaires remain richer than the Chinese ones. The average US billionaire is worth nearly $4 billion, the average in China is worth $2.4 billion. This is due to the richest Americans being worth much more than the richest Chinese. The wealthiest Chinese billionaire is Wang Jianlin (whose wealth is derived from his Wanda real estate empire), Hurun estimates him to be worth $34 billion while Forbes has his wealth at $24 billion - this would place him at only 11th (or 19th) on the list of US billionaires. Bumped down to second place in the China rich list is Jack Ma of the e-commerce firm Alibaba. Ma is of particular interest since last year he promised to endow a charitable trust with an estimated $3 billion worth of shares in the New York listed Alibaba. A Giving Pledge signatory, 44-year old Jack Ma announced last month that he will give away all his fortune after his 80th birthday and that his current focus is on jobs and wealth creation.
Unsurprisingly given China’s recent history, 95% of these billionaires are considered “self-made”, inheriting little or no wealth, although the report is not clear how many of these super-rich have family connections to state power, a likely aid to wealth in China. Six of the self-made billionaires are under 35.
Charities wishing to tap this pool of wealth may need to think again. Fundraising in mainland China has always been problematic (the rules in Hong Kong are much less stringent, and many Western charities base themselves there). Until the late 1980s it was impossible for any charity to operate in China, but since then the environment has become more permissive. The field has always been dominated by “official” charities, so-called Government Organised NGOs (GONGOs). More independent organisations face obstacles, and international organisations more so although since a round of liberalisation in 2004, some International bodies have found it possible to operate in mainland China.
This may be about to change with draft proposals published by the Chinese Communist Party in July of this year. If enacted, the proposals would mean that no funding from abroad will be allowed, that an International NGO would have to find an official sponsoring organisation (probably a GONGO) and would have to register with the public security apparatus, which would certainly exclude any organisation whose goals the Chinese state did not agree with (human rights and environmental charities would be likely to find their goals were not considered suitable).
It would seem likely that while the Chinese government is keen to encourage philanthropy by the growing body of profitable Chinese private enterprises and HNWIs for development projects and other social problems such as the “left behind children” of workers migrating within China, at the same time it wishes to minimise the influence of foreign NGOs even if this weakens the Chinese charitable sector. It has long been problematic for foreign NGOs to fundraise in China for Chinese projects, and these proposals would mean that it is only a Chinese based partner organisation that could do this.
Since the proposals were published in July, we have seen no further announcements. Perhaps there are some second thoughts about clamping down on foreign NGOs. We will have to wait and see.
Sources: Hurun Rich List 2015: http://www.hurun.net/en/ArticleShow.aspx?nid=14678 and“Uncivil Society, The Economist, 22nd August 2015
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