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Rich list shines a light on China’s shifting economy

By Zhang Hua (Global Times)

13:24, October 18, 2012

According to the 2012 China Rich List that Forbes magazine published in Shanghai Friday, the total wealth held by the country's top 100 richest individuals fell 7 percent year-on-year to $220 billion this year; while the number of Chinese billionaires dropped to 113, down from 146 in 2011.

As the global economic downturn hampers domestic growth, it is perhaps no surprise that Chinese billionaires saw their personal wealth shrink last year.

But lists like the one released by Forbes reveal not just the financial performances of the country's most successful entrepreneurs. The differences in wealth seen among the leaders of various industries reflect the difficulties and expectations which face China's transitioning economy.

First of all, it should be noted that real estate magnates still formed a strong majority on this year's rich list, despite the recent curbs on the housing market. Half of the top 10 billionaires in China are from the property sector, and nearly 30 percent of the top 400 richest are real estate developers, according to Forbes.

But while the rapid growth in China's real estate sector has created many billionaires over the past decade, as the country's economy diversifies, one can expect to see fewer property moguls among China's top earners.

Secondly, the recent woes facing China's solar industry are mirrored in Forbes' ranking. Some former billionaires in the solar manufacturing sector such as Shi Zhengrong, chairman of Suntech Power, and Ni Kailu, president of Shanghai Chaori Solar, slipped out of the list completely this year. Plagued by severe overcapacity, China's solar product makers are now struggling with weakening demand, falling prices in the domestic market as well as anti-dumping and countervailing investigations in markets overseas. New energy should be one of the key industries helping the Chinese economy climb up the industrial value ladder, yet the mindless expansion of many shortsighted enterprises has seriously damaged the sector. Actions need to be taken to prevent new emerging industries from meeting similar roadblocks.

Thirdly, most of China's tech tycoons, with a few notable exceptions, saw their wealth expand from 2011 to 2012. Robin Li, chairman of Baidu, dropped to No. 2 with $8.1 billion on a slide in the search engine's stock price. Yet, most of the top 10 magnates that enjoyed the biggest lifts came from the Internet and electronics realm. With $6.4 billion, Ma Huateng, chairman of Tencent, climbed to No. 4 from No. 13 a year ago. Pan Zhengmin, cofounder of Apple supplier AAC Technologies, ranked 35th from No. 116 in 2011. Another comeback in the electronics sector was Lei Jun, chairman of Kingsoft Corp and CEO of UC Mobile, who jumped by 146 to No. 55, with $1.5 billion.

Such a broad climb signals that innovation and technology have a great potential to spur economic growth. As China moves from being an economy propped up by inefficient, labor-intensive industries, the country can expect to see a sustained rise in tech billionaires.

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