RICH IN CHINA
A 2016 survey by Peking University estimated that the country's richest 1 percent control a third of the country’s wealth, much of it tied up in real estate, while the poorest 25 percent control about 1 percent. The number of billionaires in China in 2020 was 698, compared to 724 in the U.S., 177 in India, 56 in the U.K. and 49 in Japan. The number of millionaire households in China in 2020 was 4,447,000, compared to 18,614,000 in the U.S.; 3,025,000 in Japan and 2,469,000 in the U.K. [Source: Wikipedia Wikipedia ; Emily Rauhala, Washington Post, September 8, 2016; Boston Consulting Group]
Between 2005 and 2009, sales of luxury cars in China rose five-fold, de luxe villas seven-fold and luxury goods tripled. In 2009 the number of wealthy households was forecast to double again by 2015. “What is happening in China constitutes one of the most rapid emergences of wealth stratification in human history, ” Jeffrey Winters, a politics professor at Northwestern University and author of the book “Oligarchy” told The New Yorker. He said China is one of a small number of countries — with Russia being the other notable example — where extreme wealth stratification was eliminated in a Communist revolution and then later reëmerged. As is the case in Russia, the sudden formation of a new oligarchy in China has created super-rich people that are different from the old aristocracies that quietly protect their wealth. “No matter the culture or age, old money knows from long experience that it is far safer to be secluded and less seen, ” Winters said. But new money, as Thorstein Veblen (1857- 1929) argued, generates conspicuous consumption. [Source: Jiayang Fan. The New Yorker . February 22, 2016]
In 2017, Reuters reported: “The number of high net worth individuals (HNWIs) in China has risen nearly nine times since 2007, a private survey released showed, as strong growth in the world's second-largest economy has spurred wealth creation. Chinese with at least 10 million yuan ($1.47 million) of investable assets hit 1.6 million in 2016, up from 180,000 in 2006, according to the 2017 China Private Wealth Report by Bain Consulting and China Merchants Bank. The overall value of the private wealth market increased to 165 trillion yuan in 2016, growing at 21 percent annually in 2014-2016. Around 120,000 HNWIs had at least 100 million yuan worth of investable assets, up from less than 10,000 people in 2006. [Source: Reuters, Jun 20, 2017]
“The percentage of HNWIs with overseas investment increased to 56 percent in 2017, up from 19 percent in 2011, but the overall percentage of assets invested overseas has stabilized since 2013. The top five destinations for overseas investment were Hong Kong, the United States, Australia and Canada although Hong Kong's popularity fell 18 percent and the United States dropped 3 percent from 2015 to 2017. Respondents said their top three reasons for investing overseas were to diversify investment risks, to capture market opportunities of overseas investments and to migrate.
China's wealthy are concentrated in major cities and coastal areas, the survey found, but now 22 Chinese provinces have at least 20,000 HNWIs. Most respondents said their top priorities. were "wealth preservation" and "wealth inheritance", in contrast to 2009 when nearly half of HNWIs surveyed said "wealth creation" or "quality of life" were their main goals.Sixty-three percent of rich Chinese rely on financial service providers to manage their domestic financial assets and among them, around half use private banking services provided by commercial banks.
Hurun Report hurun.net/richlisten ; Forbes Rich Chinese List forbes.com ; Forbes Lists forbes.com ; Expert: Huang Yasheng, who teaches at the Sloan School of Management at the Massachusetts Institute of Technology, is an expert on Chinese entrepreneurs.
China’s Richest One Percent Own a Third of China’s Wealth
A Peking University’s Social Science Research Center study released in July 2014 said the richest one percent of Chinese households control more than a third of the country’s wealth. Most of the wealth is tied up in real estate. In 2012, the study says, real estate accounted for 70 percent of all household wealth in China. The bottom quarter of households by contrast control just one percent of China’s wealth. [Source: Christina Larson, Bloomberg, July 28, 2014 ***]
Christina Larson of Bloomberg wrote: “But how do China’s rich stack up against America’s? The U.S. Internal Revenue Service analyzes income, not household net wealth, and in 2012, America’s richest 1 percent took home 19.3 percent of household income. But incomes rose almost 20 percent for the top 1 percent, whereas they inched up just 1 percent for the bottom 99 percent. ***
“Economists Emmanuel Saez of the University of California at Berkeley and Gabriel Zucman of the London School of Economics estimated the distribution of household wealth in the U.S. They calculated “how much property different strata of society owned by looking at the income that was generated by that property,” as my colleague Peter Coy reported. The richest 1 percent of Americans, they found, control 40 percent of the country’s wealth, and the top 0.1 percent control more than a fifth—which would mean wealth in the U.S. is still more concentrated than in China. ***
It is assumed many rich Chinese are government officials or at least are politically connected. It is hard to come up with hard figures though. “If someone is a rich man, you can assume he has a government background,” Jimmy Wu, founder of a chemical company in Dongguan, told the Washington Post.
Communist Privileged Class in the Mao and Deng Eras
In the Mao era, the privileged Communist elite was made up of members of the Politburo, their staff, technocrats, bureaucrats, government engineers and lawyers. Many were Communist Party members. Some had peasant origins. Heros were Olympic athletes, and model miners and railway workers. The members of the professional class included writers, artists, senior professors, scientists and doctors. They had university or technical school degrees. Foreigners were a privileged class. They owned cars and apartments and enjoyed food and luxuries that no ordinary Chinese could afford.
The Communist party elite enjoyed access to special restaurants, hospitals, vacation homes, and stores with a reasonable selection of consumer goods. Perks included the highest paying jobs, first dibs on desired goods, cars with drivers, money, travel privileges, fresh fruit and choice cuts of meat unavailable to ordinary people. Their children and grandchildren were ssometimes admitted to universities without having to take the difficult entrance exams.
In Deng era someone who rose from humble origins to a position of great success was called "a golden phoenix flying from a pigeon's nest” and nouveau riche were called "red eyes." Today, rich Shanghaiese are sometimes referred to as “old carats.” The rich wives club is a reference to groups of women that come to Shanghai to shop from Nanjing, Wenzhou, and other entrepreneurial centers in Zhejiang.
Communist elite in the 1950s
Oppression of the Rich in 19th Century China
Arthur Henderson Smith wrote in “Chinese Characteristics”: “Those who have wealth, especially if they have gained it themselves, are oftener than not deeply marked by the struggles through which they have passed. The world has shown them no favors, and there is no perceptible reason why they should show any favors to the world, while there are very cogent and convincing reasons why they should not do so. [Source:“Chinese Characteristics” by Arthur Henderson Smith,1894]
“That figure of speech which likens the permanent moral improvement of the rich man to the progress of a camel through the eye of a needle, when Chinese life is attentively considered turns out to be a sober and mathematically accurate statement. Within three miles of the writer's house lives a wealthy Chinese, who has a pawn-shop and between two and three thousand Chinese acres of land. Yet in the famine year, he not only did nothing ' for the poor of the district out of which he has made his money, but even the hamlet composed of the hovels of those who work his own land contained starving families who were relieved by foreign money, in default of which the poor people must have died. In a region where about ten thousand dollars were distributed from foreign sources in aid of the victims of famine, scarcely an instance was heard of in which the local rich families took any part in alleviating the distress, which was such that it was estimated that on an average one person in every family died either of starvation or of disease. Under these circumstances, it is not strange if the employes of these wealthy families maintain toward them an attitude of secret hostility, seizing every opportunity to do them an injury, when it cannot be traced. A pawn-shop, situated in a village near to the writer's residence, had a wall which was built on the outer edge of the land owned by the firm. On one occasion it became necessary to repair this wall, which could only be done by placing a staging on the land outside, for the use of the masons. The owners of this land refused to allow it to be used for this purpose, and as the pawn-shop, which is the hereditary enemy of the poor, was for once in their power, the managers were compelled to pay a squeeze of about three hundred Mexican dollars for the right to use for a few days a bit of ground, the market value of which was perhaps two dollars.
“It is one of the concomitants of the social solidarity of the Chinese, that any man who has become rich is exposed to the devastating levies of all his relatives, of whom there are invariably an immense horde, and also of his " friends,'' who are in danger of proving to be as numerous and as needy as his relatives. The rnost conspicuous examples of this state of things occur in the southern districts of China, from which the emigration of Chinese to foreign countries chiefly takes place. Each returning emigrant is already weighed in the social balances, and the assessments are soon fixed. By the time he has been plucked for the benefit of relatives and " friends,'' and taxed for the repair of temples, the spirit is so far gone out of him that his main anxiety is to get some; friend to " lend" him a sum sufficient to get Tsack to the foreign land where he came, in order to begin the process of accumulation all over again.
“If a man who has land is unable to till the whole of it himself, his remotest cousins feel authorized to complain, if the work is given to some one else. "One family warm and well fed," says the popular adage, " is the envy of ten others." The writer is acquainted with an elderly man, who has a well-to-do neighbour with, whom he was formerly associated in one of the secret sects so common in China. On asking him about this neighbour, whose house was at a little distance from his own, it turned out that the two men who had grown up together, and had passed more than sixty years in proximity, never met. " And why was this?” " Because the other man is getting old, and does not go out much.'' "Why, then, do you not sometimes go to see him, and talk over old times. Are you not on good terms?" The person addressed smiled the smile of conscious superiority, and shook his head. "Yes,'' he said, "we are on good terms enough, but he is well off, and I am poor, and if I were to go there it would make talk. Folks would say, What is he coming here for."
Growth of the Rich in China
In 2012 there were 2.7 million U.S. dollar millionaires and 251 billionaires according to the Hurun report. According to Hurun Report, in Chinese yuan terms, the country had 875,000 multimillionaires and 55,000 billionaires in 2011 — 6.1 per cent more millionaires and 7.8 per cent more billionaires than in 2009. Many tycoons are relatively young. The average age of the respondents with at least 100 million yuan was 39; that of those with at least one billion yuan was 43. Both averages were a year younger than the previous year. [Source: Clifford Coonan Irish Times, January 22, 2011]
According to Forbes the number of dollar billionaires in China rose form 15 in 2006 to 40 in 2007. Shenzhen has the highest number of Chinese dollar millionaires per capita. According to the Boston Consulting Group there were around 391,000 millionaire households in China in 2008, up from 310,000 in 2007. India and China have the world’s fastest-growing populations of millionaires. According to Merrill Lynch, the number of millionaires in China increased 20.3 percent to 415,000 in 2007. A survey in 2009 counted 825,000 dollar millionaires with 116,000 of them in Shanghai
There were 236,000 dollar millionaires, known as dakuan, in China, in 2005 and more than 250,000 in 2006, compared with 2.7 million in the United States. China far more millionaires than in India and Russia combined, and the number is growing at a rate of 15 percent a year. By one estimate around six or seven million Chinese, about 5 percent of the population, had assets of $100,000 in the mid 2000s. This is considered rich by Chinese standards. As of 2004, there were an estimated 10,000 Chinese with assets over $10 million. As of 2007, the richest 800 people in China had an average net worth of $562 million.
In July 2008, Chinese investment fund manager Zhao Danyang of the Hong Kong-based Pureheart China Growth Investment Fund paid $2.1 million dollars in an EBay charity auction to have lunch with American billionaire Warren Buffet. At the time it was the most expensive charity auction ever held on E-Bay. The money went to the Glide Foundation, which provides social services for the poor and homeless in San Francisco. Zhao and seven others had lunch with Buffet at Smith &Wollensky steakhouse in New York.
Rich Families in China
According to recent reports by the People’s Daily and Nanfang Daily, 3,000 families nationwide control assets worth 1.70 trillion yuan ($248.9 billion), meaning that each of these nouveau riche clans is worth an average of 565 million yuan ($82.72 million). People’s Forum magazine conducted an opinion survey on the phenomenon of super-rich clans, finding that 91 percent of respondents indicated that the newly rich have benefited from networking with government officials and 69 percent said they had a bad impression of the well-heeled families. [Source: Russell Hsiao, China Brief, June 24, 2010]
There is well-documented evidence that the children of famous cadres, such as late patriarch Deng Xiaoping, ex-president Jiang Zemin, ex-premiers Li Peng and Zhu Rongji, President Hu and Premier Wen Jiabao, are successful entrepreneurs. According to liberal economist Luo Tianhao, a researcher at the Beijing-based Changjiang Business School, red families, meaning those of top cadres, figured prominently among the country’s affluent clans. These business clans boast deep political and economic capital, Luo said. He added that due to their political connections, these families do particularly well in trade, energy and infrastructure, which are sectors that are still wholly or partially controlled by the state. Take, for example, the Li Peng clan. Li’s wife and two children have been active in the energy sector since the 1990s. Son Li Xiaoping is the former chairman of China Huaneng, an energy conglomerate; and daughter Li Xiaolin is the CEO of mammoth China Power International Development.
On China’s first wave of entrepreneurs, Jiayang Fan wrote in The New Yorker: “Having amassed vast amounts of capital in the transition to a market economy, they can afford to bring up their children in a new atmosphere of privilege, and the legacy of the one-child policy gives the beam of parental expectation an especially tight focus. Furthermore, the memory of poverty and backwardness is ever-present in the collective consciousness. I remembered something Ray had told me: “The poorer your parents were when they were young, the more they want a better environment for their kids.” The desire to have a Western-educated child is spurred by considerations of prestige as much as by practicalities. [Source: Jiayang Fan. The New Yorker . February 22, 2016]
VIPs at a Beijing Olympics event
Affluent Children of the Cultural Revolution
Jonathan Watts wrote in The Guardian: Cindy Tai is "the head of a marketing agency and former head of EMI Music in China, who helped organize the first Rolling Stones concert in Shanghai. As a child during the Cultural Revolution, Cindy and her academic parents were sent from Shanghai to a farm on the nearby island of Chongming. “We had enough to eat, but nothing to spare. We were very happy if we got a little meat on the table once a week. My parents suffered. I vowed that one day I would buy them whatever they wanted.”[Source: Jonathan Watts, The Guardian, June 26, 2010, edited from “When A Billion Chinese Jump” by Jonathan Watts Faber, 2010 ]
"She has achieved that ambition; now, her dream is “to create an organic farm. I'd like to grow fruit, vegetables and rice, raise pigs and chickens. And to have a helicopter, because the traffic is so bad.” But like many affluent consumers around the world, Cindy's environmentalism seems selective. She has blueberries delivered from an organic farm, baguettes from a French bakery in Xintiandi and olive oil from Italy. She eats out at least once a day, and at one point she and her French husband had four cars: a BMW, an MG and two Mercs. Now they have two; a sign, she says, of their increasing concern for the planet. Later, however, she reveals that her interest has switched to yachts. One is moored near their second home in Cannes.
"She may yet get another luxury car. Cindy is a member of the Shanghai Porsche club, mainly to keep up with her friends, and has been invited to an awards ceremony hosted by Jaguar. I shamelessly ask if I can come along. The venue for the Jaguar Gorgeous Award Party is a renovated mansion off Huaihai Road, a few minutes' walk from the Barbie store. In cocktail dresses and designer suits, guests sip wine in the courtyard, where they are treated to a sales pitch for the new 5-litre XKR: “It is a wow car!” gushes a PR lady who introduces herself by her westernized name, Seraph. I am sceptical: “But you can barely move in Shanghai's traffic. Why would anyone want such a huge engine?” “Rich people never take the subway,” Seraph replies. “Even if the traffic is bad, they need a car. Jaguar is nothing but gorgeous and beautiful.”
Rising Number of Millionaires
In April 2011, China was on the verge of having 1 million millionaires. According to according to the Hurun Wealth Report the mainland has 960,000 millionaires with personal wealth of 10 million yuan ($1.5 million) or more. That is up 9.7 percent year-on-year, said the GroupM Knowledge -Hurun Wealth Report 2011. This is the third year of the report, written by publishing and events institute Hurun Report in cooperation with think tank GroupM Knowledge. In 2009 there were 825,000 such millionaires while last year the number had grown to 875,000. [Source: Qian Yanfeng, China Daily, April 13, 2011]
Rising property prices and a fast-growing GDP have been the key drivers for the rising number of Chinese millionaires, according to the report. It found that 55 percent of Chinese millionaires derived their wealth from private businesses, and 20 percent are property speculators who have ridden the fast hike in home prices. About 15 percent are stock gurus, while the remaining 10 percent are high-earning salaried executives.
Housing prices rose across the country by 13.7 percent in 2010 according to government statistics, with luxury property prices rising even faster. High-end property prices in China's leading financial metropolis Shanghai, for instance, grew 21 percent last year, according to figures from UK-based Knight Frank, one of the world's largest commercial and residential estate agents.
Despite the Chinese government's efforts to curb property speculation and control rampant housing prices, "the overall confidence of China's millionaires in the property sector and China's overall economy remains very high," said Rupert Hoogewerf, chairman and chief researcher of Hurun Report. "The impact (of the tightening measures) may be on excessive new wealth creation, but I don't think it is going to affect very much the (rich's) appetite for luxury products," said Hoogewerf, known in China by his Chinese name Hu Run. "For most luxury brands, the Chinese luxury consumers are now No 1: either representing the biggest market share or the fastest-growing," he added.
Of the 960,000 millionaires, 60,000 have been identified as China's super rich with 100 million yuan or more in wealth, up 9 percent year-on-year. Beijing led the way with 10,000 residents boasting 100 million yuan or more, followed by Guangdong province with 9,000 and Shanghai with 7,800. The three places also led in the number of millionaires with wealth of 10 million yuan or more.
According to the report, Chinese millionaires average 39 years old, a full 15 years younger than their Western counterparts. Thirty percent of the millionaires are female, the same as last year. The report also put the number of China's billionaires at 4,000, but only a third were on the Hurun China Rich List 2010. "(It suggests) there is still a great deal of hidden wealth in the Chinese economy," said Hoogewerf.
Getting Rich in China
Early in the Deng era many tycoons in China made their money through real estate, Chinese medicines, investments and construction or took advantage of early privatization and restructuring programs launched in the late 1970s and early 1980s. Almost a prerequisite to getting rich was having some kind of connection with the Communist Party, possessing skills at navigating through bureaucracy and having a knack for forming friendships with key officials.
With so many fortunes made from government contracts and with funding from state-run institutions it has been said that getting rich in China is not a matter of know-how but of know-who. Often the secret is befriending the right officials and pushing the right buttons — whether they be perks, deals or outright bribes — to get their approval.
Many have got rich through less than legitimate means. According to an article in the China Business Times, early in the Deng era Beijing residents recognized several kinds of rich people. "red hats" government officials who took bribes; "yellow hats" pornographers; "blue hats" smugglers; and "white hat" drug dealers.
The accumulation of wealth is no easy task. There are lots bureaucratic obstacles and corrupt officials who want a cut and are willing to be spoilers if they don’t get it. Many millionaires rode high for a while and then found themselves in jail.
Much of wealth is held in assets that are difficult to transfer — yuan-denominated shares and government bonds — or cash or money in bank accounts that are often kept secret. Using methods developed by Hong Kong and by overseas Chinese, wealthy families set up a maze of public and private companies, including offshore entities. These companies exchange property, finances and shift profits around to avoid taxes. It is not uncommon for a company to have $280,000 in revenues and $16.3 million in profits one year and $134 million in revenues and $20 million in profits the next
The desire to get rich sometimes takes some extreme forms. In 2005, a 15-year-old girl kidnaped one of her relatives and demanded a $25,000 ransom. According to the Eastern Morning Post, ‘she sought to earn the most money on the shortest time.”
Pioneering Millionaires in China
Some pioneering businessmen were political prisoners or criminals in the 1970s and 1980s who were forced to go into business because they didn't belong to "work units" and were unable to get regular jobs.
Mou Qizhong, the owner of China's sixth largest private company in the mid 1990s, is a former glass factory worker who narrowly escaped a death sentence in the Cultural Revolution and was imprisoned in 1983 for profiteering. After he was released he made a small fortune from selling clocks. In 1992 he arranging a barter deal in which 500 railroad cars filled with Chinese-made consumer goods were traded for four Tu-154 airplanes and then used the planes to found Sichuan Airlines. His company had $1.1 billion in assets in 1995. At that time he began work at 5:00am and worked seven days a week.
Millionaire Yang, made his first fortune by encouraging customers in southern China to replace their boring white mosquito nets with brightly colored and patterned ones. Three years after hatching this idea he was a rich man. The Mongolian Niu Gengheng turned his passion for cows into the largest dairy products company in China.
Zeng Weili, an entrepreneur who rode around southern China on a bicycle in the mid 1980s selling shares for his company, created the Baoan Group, a conglomerate that controlled $675 million in assets in 1995. At that time the Baoan Group had stakes in 67 business and 37 joint ventures, including partnerships in chain of Peking duck restaurants, a pharmaceutical firm and a large Beijing department store. The company had offices in Hong Kong and Los Angeles and was beginning to venture into the movie business but was also trying to raise $60 million in cash to pay off angry bondholders whose bonds had come due, and prop up huge real estate projects that were in trouble.
China’s First Business License
In 1979, the first business license in China was given to Zhang Huamei a 19-year-old daughter of workers in a state umbrella factory who illegally sold trinkets from a table, who wanted to conduct her business legally. A few years earlier just seeking such a license would have earned her the label of “capitalist roader,” possibly making her a target of Red Guards attacks. Unable to obtain such a license in her home town she traveled 480 kilometers to Wenzhou, a region of China with a tradition of entrepreneurship. [Source: Jonathan Margolis, Times of London, January 2010]
Zhang is now a dollar millionaire and head of the Huamei garment Accessory Company, a supplier of many of the world’s buttons. Looking back on her early years as a pioneering entrepreneur she told the Times of London, “My classmates were ashamed of me for starting my own business. They would turn their heads away when passing my house and pretend not to know me.” On her first sale she said, “the first thing I sold was a toy watch. It was a sunny morning in May 1978, I bought it for 0.15 yuan and sold it for .20. I was very, very excited to make a profit. But I was also very nervous and very afraid the local government staff would come to stop it.”
Soon she expanded into ferry trips to Shanghai, needles, thread, elastic, buttons and was able to make two yuan a day, ten times the state wage. When officials first came to her house she feared the worst but was told what she was doing was alright in light of new reforms. The official said all she needed to do was fill out some forms and provide two photos and she could be legitimate, She was still hesitant, worried about what would happen if the policy changed and she was an record as being a capitalist.
Corrupt Millionaires in China
One Beijing businessman told the Los Angeles Times, “Chinese people are suspicious of anyone who gets rich. They think the only way to get rich is to know somebody and be in on an inside deal.” According to a 2011 edition of the respected Hurun Report, the richest 70 of China’s parliamentarians boast a combined wealth of 493.1 billion yuan ($75.1 billion). By contrast, the assets of the 70 most well-heeled members of the U.S. Congress add up to no more than $4.8 billion.
In 2001, Yang Rong was listed by Forbes magazine as the third richest man in China, with a net worth estimated at $840 million. He was the founder of the first mainland Chinese company to have shares sold on the New York Stick Exchange. In 2003, Yang was in hiding in California. In China he had been charged with “economic crimes” in connection with his management as CEO of Brilliance China Automotive, China’s largest minivan maker. Yang claims he was cheated by the government
In 2001, Yang Bin was listed by Forbes magazine as the second richest man in China, with a net worth estimated at $900 million. He was the founder of the Hong Kong-listed orchid grower Euro-Asia Agricultural Holdings and was appointed by Beijing to run a special economic zone in North Korea. In November 2002, he was placed under house arrest on tax evasion charges. In July 2003, he was sentenced to 18 years in jail for contract fraud, bribery, illegally occupying farmland, and forging financial documents.
Zhou Zhenghyi is a Shanghai tycoon and former snack-shop owner who was once listed as the 11th richest man on the Forbes China list with a fortune of $320 million. In 2007, he was sentenced to 16 years in prison on corruption charges and for faking documents and illegally using bank loans to speculate on the stock market.
Wang Xuebing, the head of the Bank of China, China’s second largest bank, was investigated for a questionable $23 million loan linked to Wang's wife.
Zhiu Yiming, the youngest person on the Forbes list of the richest people on China in 2005, was sentenced to life in prison for bank fraud. He is said to have forged financial reports to obtain a $48.5 million loan which he used to acquire a stake in major water and electricity supplier.
Disdain for China's Super-Rich
Ning Hui wrote in The Atlantic, “For a China still undergoing rapid economic development, a new and divisive character has emerged: the wealthy young scion. Children who come from money in China, colloquially called fu'erdai, are often associated with many negative stereotypes. Fu'erdai literally translates to "rich second generation" and are generally either guan'erdai, meaning "government official second generation;" xing'erdai, meaning "super-star second generation;" or hong'erdai, children whose families have strong roots in the Communist Party and can "eat from both plates." [Source: Ning Hui, The Atlantic, March 12, 2013 -]
“Perhaps the most representative incident of backlash against fu'erdai occurred in 2010, when the 22 year old Li Qimin, intoxicated and speeding in his luxury car, hit a college girl and killed her. When apprehended, he shouted "My father is Li Gang!" referring to a well-known local official. The phrase quickly went viral, and to this day represents fu'erdai arrogance.” -
One “case that angered millions of Chinese microbloggers was that of Li Tianyi, who was both fu'erdai and hong'erdai. Li Tianyi, the 17-year-old son of famous Chinese general and singer Li Shuangjiang, was prosecuted for his involvement in a gang rape. Many Chinese netizens saw Li Tianyi's crime as proof that their negative feelings about privileged families were right, and stoked their worries that the privileged will always be above the law in Chinese society. The case of Li Tianyi and Li Shuangjiang differs from those of other rich and powerful families because Li Shuangjiang's popular "red songs" from the Cultural Revolution praise the Party's greatness. In this case, online criticism was directed both at Li's wealth and his political privilege. Even the People's Daily, a state-run media outlet, recognized the significance of the issue : "Multiple incidents involving 'keng die' [children whose misdeeds have tarnished their fathers' reputations] have become hot-button issues in society, because of who they are and because of the violence or arrogance involved. Moreover, the era they live in is characterized by a public trust gap that stems from China's current class divisions, and we must build a bridge to re-build that trust." -
China's Elite Show Restraint Xi Jinping’s Anti-Corruption Drive
Jerome Taylor of AFP wrote: “China's big spenders are reining in overt shows of wealth, shelving shopping trips in Hong Kong and Macau gambling sprees in the face of the Communist Party's anti-corruption and frugality drive, analysts say.” Xi’s much-publicised graft crackdown has included “a series of high profile takedowns of party officials sending shockwaves through an elite who once did little to hide their prosperity. A related austerity drive — ordering an end to excessive gift-giving and banquets within the state sector — has also meant officials are wary of popping too many champagne corks. [Source: Jerome Taylor, AFP, August 13, 2014 ||||]
“Fearful of attracting any scrutiny that might lead to a potentially career-ending probe, many of China's most powerful are either tightening their belts or being much more careful about how they spend their money publicly, analysts say. That shift has been most keenly felt in the Chinese elite's nearest playgrounds of Hong Kong and Macau. But a ripple effect is beginning to have an impact as far afield as the luxury fashion houses of Europe. "The corruption crackdown shows no signs of slowing down. It has created a lot of concern within the country and as far as I can see a lot of high profile individuals are much more cautious about their overt spending," Steve Vickers, a risk consultant and former head of the Royal Hong Kong Police’s Criminal Intelligence Bureau, told AFP. ||||
Don Lee wrote in the Los Angeles Times, “Ceremonial red carpets and floral decor are out. Flying coach is in. Party cadres are being told to double up in hotel rooms. And in what has become a particular crowd pleaser with the public, Beijing is going after those who have long abused the privileges of military license plates, which almost guarantee immunity from traffic laws and other such inconveniences. “It's a much-debated question here whether this wide-ranging campaign is aimed at the root causes of corruption and income inequality, or only addressing the most visible symptoms. Whichever the case, Xi and his lieutenants have good reason for their frugality program. Beijing has long maintained control in part by tacitly promising that over time everyone will benefit from the country's new wealth. Rampant corruption and the garish displays of affluence by senior officials and their families strike at the heart of Beijing's promise that it is working to make life better for all. Ordinary Chinese, often through microblogs and other social media, have increasingly lashed out at what they see as a privileged class of political elites. [Source: Don Lee, Los Angeles Times, May 19, 2013 +++]
“Minxin Pei, an expert on Chinese governance at Claremont McKenna College, thinks Xi has two objectives with his anticorruption program: "To appease the Chinese public to show that he has heard their voice … [and] to tell officials throughout the system that the new leadership has absolute authority." Whatever the government's purpose, the campaign has affected spending on all kinds of high-end goods and services. Some analysts blame Xi's crackdown for China's disappointing economic growth in the first quarter, which has brought financial pain to many workers. The repercussions of the austerity drive aren't just domestic. Official visits sponsored by government entities to the United States and other countries are rapidly declining, according to travel industry sources. That is sure to be felt by California, a popular destination among the Chinese.” +++
China’s Wealthy and the Fear of Losing Their Money
According to the Economist, “Mainland China offers scant legal protection for private property. The rich, many of whom cut corners to get that way, know they could lose it all suddenly. Many also fear losing their political patrons" when China’s Communist Party anoints leaders. Small wonder they are seeking havens for their money and their families. For many rich Chinese the solution to this problem is going abroad or being prepared to do do. According to the Hurun Report, a wealth researcher, in the early 2000s some 14 percent of rich Chinese say they have already left the country or are filling out paperwork to obtain a foreign passport. Another 46 percent are considering one of these steps. A recent report by Bank of America Merrill Lynch warned about the destabilising effects of “hot money” speeding out of China.
Jiayang Fan wrote in The New Yorker: ““John Osburg, an anthropologist who spent years studying successful businessmen in Chengdu, told me that “there’s always a fear that, if the officials to whom they’re tied are brought down in an anti-corruption campaign, it could bring trouble for them, too, and lead to the seizure of their assets. There’s also a concern that business rivals who may be better connected to people in the government could use their ties to the party-state to bring down their competitors.” Some people he knew considered being on Forbes’s annual list of the richest people in China a curse. “The people on that list, for several years in a row, within a year or two of appearing, would be the target of some kind of criminal investigation or they’d be brought down in a corruption scandal, ” he said. [Source: Jiayang Fan. The New Yorker . February 22, 2016]
“In Vancouver, Weymi mentioned the pervasiveness of such anxieties: “Some of my relatives in Shanghai who are officials — all clean ones, of course — have told me stories about their friends who are fretting about the recent corruption crackdown. In China, it’s not just about what you did but what your network of relationships is.” Weyme “recalled a visit to Shanghai when she had strayed into a shantytown of migrant workers from the Chinese countryside, and then spoke of the impoverished rural region of Yunnan, in southern China, from which her mother came. “When I was little, my mom would tell me stories about how poor they were, ” she said. “It was a kind of poverty that makes you fearful the rest of your life.” Weymi’s grandmother and aunt took in laundry to make a living. “She didn’t want to be like her mom or older sister, always gossiping about those in the village a smidgen better off than themselves.” Weymi put down her chopsticks. “It’s that kind of typical provincial pettiness, but that was her entire life if she had stayed.” She shook her head and drew a breath. “I mean, can you just imagine?”
Image Sources: Communist Elite, University of Washington; Others, Hurun.com and Forbes
Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.
Last updated October 2021