China’s Lack of Mega-Rich

By Matthew Yglesias

China’s growth has been accompanied by some stark increases in inequality, but it seems noteworthy to me that one area in which the People’s Republic is a real laggard is the development of mega-rich individuals. For example, according to Forbes’ authoritative list the world’s top 100 richest individuals includes zero citizens of mainland China. The richest man in the country, Zong Qinghou, clocks in at number 103. Probably given Chinese growth and the continued economic weakness in the developed world he’ll be able to crack the top 100 soon. But his $7 billion fortune is dwarfed by other developing world tycoons like Carlos Slim (Mexico, $54 billion) Mukesh Ambani (India, $29 billion) or Eike Batista (Brazil, $27 billion).

Part of the issue here is the existence of Hong Kong as a separate jurisdiction which contains a number of mega-billionaires. But the basic reality is that China’s state-led model of economic growth has created huge increases in per capita income and led the PRC to surpass Japan as the #2 economy in the world without creating much in the way of really big really successful new firms. Instead China’s largest companies are basically controlled by the state.

As a bonus fun counterpoint fact, egalitarian Sweden has a wildly disproportionate number of mega-rich citizens. With only 9 million people and an overall GDP less than ten percent the size of China’s, Sweden boast two of the fifteen richest people on the planet—the heads of Ikea and H&M. That’s in part just a coincidence, but I also think it reflects the reality that high taxes and high public spending aside the modern-day Nordic countries actually have a very neoliberal underlying economic structure whereas China is very much the reverse.