The Hurun Rich List is the annual report about the Chinese rich. 2008 is the tenth anniversary of this list. The Hurun Rich List 2008 was released on October 7, which has been expanded to 1000 people.

Huang Back on No.1 Again

39-year old Huang Guangyu is the richest man in China for the third time in five years with a personal fortune of US$6.3 billion. Huang made his fortune with Gome, a household appliance retailer, and has been expanding into Beijing property and private equity investments. Huang is also China’s cash-richest individual, having cashed out US$1.9 billion to date of releasing the list by selling privately-held retail outlets to Gome’s HK-listed vehicle, in which he still retains a 35% shareholding. Since dropping out from school aged sixteen, Huang has built Gome into China’s largest retailer by sales with 1400 outlets and sales last year surpassing US$10 billion. His Suning rival Zhang Jindong also makes the Top Ten with a personal fortune of US$3.2 billion.

Property and Stock Market Investors Lose Heavily

“China’s property tycoons and stock market investors have had a bloody nose, losing 70% of their stock wealth compared with last year,” says Rupert Hoogewerf, publisher of Hurun Report and founder of the China Rich List. “The credit crunch has meant a year of rationalization after last year’s stock market boom. The next step for China’s entrepreneurs is to build sustainable business models that can survive a slowdown in the market. Corporate social responsibility and building brands are now top of the agenda.” Property tycoons and stock market investors are unpopular in China, since their wealth is considered by many to have come too easily and without adequate corporate social responsibility.

Rising Political Status

“2008 has been the year of China’s entrepreneurs coming of age in terms of political status,” says Rupert Hoogewerf, publisher of Hurun Report and founder of the China Rich List. “The Hurun Rich List shows concrete evidence of the private sector and the party’s convergence of interests.”

The Hurun Rich List now has 80 delegates to the National People’s Congress (NPC) and 68 to the China People’s Political Consultative Congress (CPPCC). This means that 15% of the Hurun Rich List is now either a NPC or CPPCC delegate, compared with only 10% last year. “The entrepreneurs at the top of the Hurun Rich List are best-placed to reap the rewards of any subsequent resurgence,” says Hoogewerf. “The global credit crunch, which is coupled with the strength of the RMB, provides cash-rich Chinese tycoons with the opportunity to make acquisitions internationally.”

2008 has been a momentous year for the Chinese economy. On top of global economic turbulence, China has come through the double disaster of the record winter storm and the Wenchuan earthquake, successfully managed the Olympics and completed its first space walk. The year will close with ceremonies and debate to mark the thirtieth anniversary of the Reform and Opening up, which heralded the beginning of the market reforms, a turning point in global economic history. It is worth taking stock of how far Chinese business has developed over this thirty-year period, especially its past decade. Compare the first Hurun Rich List of 1999, when we could only rank fifty individuals with a cut-off of US$6 million, with this year’s list, and it becomes clear how China’s top entrepreneurs have consolidated their positions.

Some General Background

The average wealth of the Hurun 1000 fell 22% to US$439 million. This is the first time since 2002 that the average wealth has fallen. Despite the fall in wealth, there are still 101 Chinese billionaires in US$ terms, only five less than last year. It takes US$100 million to make the list despite an increase to 1000 people up from 800 last year. Over a third of the Hurun 1000 saw their wealth shrink, yet a quarter increased and there were 324 new names. East China is the economic powerhouse, with a third based there, a quarter in each of South and North China with the rest scattered across the country. The profile of China’s richest is a 49-year old man from East China in property development or manufacturing, who started his business at the time of the Deng Xiaoping’s Southern Tour in 1993.

Despite the property downturn, there are still more property developers on the Hurun 1000 than any other industry, with a quarter of the people on the list involved in property. The downturn, in fact, offers consolidation opportunities to the biggest players. Other industries that are becoming increasingly consolidated include Manufacturing, IT, Retail, Steel, Food and Apparels. Industries on the rise include Healthcare especially Traditional Chinese Medicine, Financial Services and the Service Sector.