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      Socialism à la chinoise

      Socialism à la chinoise

      Are China’s billionaires gaining political influence because they are competent managers or did they become rich because they had political power?  Rupert Hoogewerf, founder of the influential Chinese rich list, the Hurun Report, comes down clearly for the first option.

      Are China’s billionaires gaining political influence because they are competent managers or did they become rich because they had political power?  Rupert Hoogewerf, founder of the influential Chinese rich list, the Hurun Report, comes down clearly for the first option. 

      Speaking for the third year running at the China Chopsticks Dinner Group, Rupert Hoogewerf gave a speech on “Capitalism in Communist China.” He was followed by the Chinese Ambassador to Luxembourg, H.E. Zeng Xianqi, who delivered a droll speech on “Socialism à la chinoise”.

      The Chinese super-rich are all more or less the same age, explained Mr Hoogewerf. They picked up the gauntlet thrown down by Deng Xiaoping, in 1993, when he stated that it was “ok to get rich”.  19 years later, vast enterprises have been built up and floated on the stock exchange and the resulting billionaires are in the process of cashing in on their fortunes.

      The Hurun Report tracks the 1000 richest people in China. The latest report, for 2012, shows the fortune in 1000th position to be worth $300m. There are currently 500 US$ billionaires, a figure that Mr Hoogewerf expects to rise to 1700 by 2020.

      Interestingly, members of the Rich List can be found in increasing numbers at the top of the political ladder. Seven sit in the highest committee of all, the Communist Party Congress – 2200 people who vote on the Party Chairman. A further 70 are members of the 3000 strong National People’s Congress and 80 sit in the 2200 strong CPPCC (Chinese People’s Political Consultative Conference), which acts as an upper house.

      These people are “super-capable”, says Rupert Hoogewerf. As business leaders they manage tens of thousands of people, pay large amounts of tax and get noticed. “On the whole, these people get appointed because they are good.”

      The top 1000 live in ten cities, a quarter of them in Beijing, Shanghai and Shenzhen. Interestingly, the top routes to fortune are manufacturing (21%) and property (20%). This contrasts with the top 1000 fortunes in the Rest of the World, which are founded on investment (19%) and entertainment/media (9%).

      Self improvement is a major theme: 80% of the Rich List go on executive MBA programmes and they are health conscious, enjoying sport and travel. 80% send their children overseas to be educated (77% to the USA or the UK). A hefty 60% would like to live outside China altogether, but the EU is not favoured: top locations would be the US, Canada, Australia and Singapore.

      Rich List members are generous donors, with the characteristic that this is done as publicly as possible.  The top philanthropic targets are education and home town improvement, or disaster relief when a situation occurs.

      Interestingly, 90% of the Rich List say they are happy, though the figure falls slightly among the super-rich. The happiest moment of their life (male respondents) was when they started up their own business.

      Mr Hoogewerf finished by giving some light hearted advice on what to talk about if you find yourself in social conversation with a member of the Rich List: travel tips, health tips and educational tips are always welcome.

      Ambassador Zeng completed the picture by comparing the “Communist” label to the “Christian Socialist” label in Europe. Only around 6% of the population are party members, he pointed out. On the other hand capitalism is merely “a means to an end, not an end in itself”. Ambassador Zeng said he thought that China was a socialist country: “socialism à la chinoise!” He pointed out that China was not rich, with a GDP/per capita in 100th place worldwide and 150m people living in poverty. In 2012, the 18th Congress of the Chinese Communist Party selected two goals: protection of the environment and improving the lives of the people.

      The speeches were followed by a long Q&A session and a general mingling of the 86 guests present. ER