The private sector continues to surprise with the speed of its growth. In December the government revised its 2004 GDP figure up by almost 20%, announcing it had previously underestimated the contribution of the service sector (anything from real estate to transportation and restaurants) aka the private sector. Despite the larger number, China's income levels remain far behind those of the developed world. Per capita income for each of China's nearly 1.3 billion people under the new numbers is about US$1,230 a year, ranking China 107th in per capita terms.
From the macro to the micro. In the past couple of months, two more US Dollar billionaires have come to light: one who has became the first private Chinese company to win a full listing on the New York Stock Exchange and another who sits with a commuted death sentence hanging over his head. The former is Shi Zhengrong, who only set up his solar panel business four years ago and today sits on a US$1.5 billion fortune, highlighting yet again the lightening speed of the private sector. The latter is 39-year old Yuan Baojing, whose staggering US$6 billion fortune only came to light after he agreed to hand it over in exchange for a stay of execution on a charge of the murder of a former employee. Tellingly, most of Yuan's fortune was already offshore in an Indonesia oil field.
SURVEY
What lifestyle do China's entrepreneurs aspire to? How do they spend all their legendary cash? Hurun Report's second annual Survey of China's Richest seeks to address these questions in the largest and most authorative survey of its kind. With data collected in a one-on-one basis from 589 Mainland Chinese with wealth of RMB 10 million or more (177 of them with RMB 100 million or more), Hurun Report is proud to announce the results at the Awards Ceremony in January and in this Special Issue of the magazine. The products and services of the winners of our awards tell the story of the growth of China's new rich class from another angle.
Luxury brands rely heavily on local agents to represent them in each region and it was with this in mind that the Hurun Report expanded the 2006 Awards to include nine individual regions (Shanghai, Beijing, Guangdong, Zhejiang, Jiangsu, North-East China, Shanxi, Shandong and Sichuan/Chongqing) as well as an overall prize for the country. The results turned up some surprises, demonstrating the importance of a strong local agent.
Whilst European brands may have won the lion's share of the 2006 Awards, Wuliangye and Moutai stand out as stewards of Chinese culture and history. In a recent visit to their breweries deep in the mountains of Sichuan and Guizhou, I was given a rare insight into the dominance of these ‘baijiu' or Chinese liquor brands. Able to trace their history back hundreds if not a thousand years, what stood out was their ‘pure' homegrown history, a refreshing take in a country where so many products and services sell themselves as imitations of Western ideals.
UK TRAVEL
Travel is the most popular hobby of China's new rich, according to our survey. Whilst Australia won our main award as the Preferred Holiday Destination, the survey highlights the cultural differences between individual regions: Shanghai entrepreneurs prefer France and Europe whilst Beijing entrepreneurs prefer the US. On the domestic front, Chinese entrepreneurs are now becoming more aware of that gem which is Sanya sitting on their doorstep.
In the third of our series of reports on the super luxury of a country, Hurun Report is pleased to present the Super Luxury Report on the UK and an exclusive interview with the UK's top homegrown entrepreneur, Sir Richard Branson. Our reporter Mica Quinn had to fly half-way around the world to meet with Branson on his private island in the Caribbean. Once there Mica spent the day sailing with the Branson family, before getting a unique insight into Branson's vision for Virgin in China.
FIRST-MOVER ADVANTAGE
These past few years have seen many of China's entrepreneurs become exposed to luxury brands for the first time. The effect? A mad rush of impulse buying. At a Hurun Report event last month, one Zhejiang entrepreneur spent RMB 5 million on a rarified car. Nothing particularly out of the ordinary so far, but within ten days, his friends back home had jumped on the bandwagon, expanding the order to six of these cars. This – much as anything else – highlights the insatiable demand for creative new status symbols that stand these successful entrepreneurs out from the crowd.
Hurun Report continues to act as the platform of choice for many of China's top entrepreneurs across the country. In the past two months, we have held events in Guangzhou, Beijing, Shanghai and Hangzhou ranking from thirty to one hundred and fifty entrepreneurs on and off our China Rich Lists.
2006 promises many new opportunities for China's entrepreneurs and their advisers with products and services that are trying to keep up with them. I am sure there will be plenty of surprises but you can rely on the Hurun Report to be there to track what China's entrepreneurs are up to.
