China’s Richest 2019: Growing Consumer Appetite Boosts Fortunes Of Nation’s Wealthiest
This story is part of Forbes’ coverage of China’s Richest 2019.
The headlines from China in the past year have been gloomy. Trade friction with the U.S. has risen, while GDP growth in the world’s second-largest economy slowed to a near three-decade low of 6%. Happily for the country’s wealthiest, however, there’s more good news than bad among the members of our list of China’s richest.
The total wealth of the 400 members of the China Rich List rose by more than a fifth from a year ago, to $1.29 trillion, as China’s consumers spent more on everything and spent more of it online. More than half the listees saw their fortunes climb in the past year, while a quarter saw their fortunes fall. The minimum net worth needed to make the list this year was $1 billion, back to 2017’s threshold, after dropping in 2018 to $840 million. There were 60 newcomers to the list; returnees made up most of the rest.
Topping the list for a second year is Jack Ma, who recently resigned as chairman of the e-commerce giant he co-founded, Alibaba, to focus on philanthropy. Ma’s fortune rose to $38.2 billion from $34.6 billion a year earlier as New York-listed Alibaba gained on China’s e-commerce boom. Second and third on the list: Tencent CEO Huateng “Pony” Ma, with a fortune worth $36 billion, and Evergrande Group Chairman Hui Ka Yan, worth an estimated $27.7 billion, their ranks are unchanged from last year.
Growing fortunes in online shopping appear throughout the list. Colin Huang, CEO of e-commerce site Pinduoduo, saw his estimated net worth soar to $21.2 billion from $11.25 billion last year as Pinduoduo gained on rival JD.com. Entrepreneurs who provide services tied to e-commerce also did well: Lai Meisong, CEO of Alibaba-backed express delivery firm ZTO, saw his fortune climb to $4.6 billion from $3.35 billion.
Pharmaceutical and healthcare fortunes are also benefitting as rising incomes enable Chinese to spend more on healthcare. Sun Piaoyang, chairman of Jiangsu Hengrui Medicine, moved up to No. 4 with a fortune of $25.8 billion. He shares that spot with his wife Zhong Huijuan. The two gained on growing business at Sun’s Hengrui as well as a Hong Kong IPO by Zhong-led company Jiangsu Hansoh Pharmaceutical. Li Xiting, chairman of medical equipment supplier Shenzhen Mindray Bio-Medical Electronics, also moved up to about $8.5 billion from $1.8 billion as its shares soared after the company relisted its shares at home in China following its 2016 delisting from the New York Stock Exchange.
Sportswear maker Anta Sports’ Hong Kong-listed shares have more than doubled in the past year, helping propel the fortune of its two leaders—brothers Ding Shizhong and Ding Shijia—up by almost 150% to $5.6 and $5.5 billion, respectively. Two Anta executives also landed on the list for the first time: CFO Lai Shixian, a Ding brother-in-law, at $1.4 billion and Wang Wenmo, a family cousin who manages Anta’s …
Markets have been blowing hot and cold regarding the prospects of a recession in the U.S. The Institute of Supply Management’s November survey shows that the index of factory activities in the U.S. fell to 48.1 from 48.3 in October (any reading below 50 is indicative of a contraction). This is confounding the expectation that America’s domestic industrial production would improve in anticipation of a “deal” in the U.S.-China trade war. However, the Department of Labor also reported that 266,000 jobs have been added to the economy in November, bringing unemployment rate down to a historic low of 3.5%. A confusing situation has just been made more confusing.
It has been said that generals are always fighting the last war. It’s not that different when it comes to fighting economic downturns. Since the global financial crisis a decade ago, we have been scouring the horizon for any signs of financial fragility, such as asset bubbles, that could plunge us into the next global recession. Despite mounting evidence of a weakening economy, there are no asset bubbles comparable to that of the pre-2008 period. And we won’t find any, even as we edge closer to the next recession. Since the last global financial crisis, the global economy has been reshaped by different forces, and the coming recession will be caused by factors totally different from those of the last one.
First off, the global economy today is mired in uncertainty arising from the trade war, an enfeebled Europe, Brexit and rising geopolitical tensions. An even deeper source of uncertainty is that the liberal global economic order, in place since the 1950s, is dying. Two trends are converging to kill it. The first is the West’s declining economic dominance relative to the rest of the world, and China in particular. The second is the rise of populism in Western democracies, arguably the most serious challenge to the legitimacy of the liberal global order. And yet, even as the liberal global economic order fades away, it’s unclear what a post-liberal global economic order will look like. So for now, the global economy is like a barfly at closing time: it has no clue where it’s going, but it can’t stay here.
Developed world economies have meanwhile been seriously weakened by prolonged zero interest rates, making them vulnerable to unexpected shocks. Extraordinarily low interest rates distort the price of money, arguably the single most important price signal in a market economy. They poison the business environment, allowing poorly run businesses to survive, jamming the gears of creative destruction that drive any economic renewal. The survival of poorly run businesses also suck profits from more successful businesses, sapping their ability to expand.
Against this backdrop, any number of missteps could trigger chain reactions that push developed world economies into recession. But we should also be prepared for a potentially different kind of downturn. The accepted definition of a recession is two consecutive quarters of contraction in an economy.…