Assets of the Wealthy Shrink, and Internet Technology Moguls Drop on China’s Rich List

Tycoons in beverage, vaccine, pig breeding sectors rise in the rich ranking

Rupert Hoogewerf (R), best known as Hurun, announces this year's "Rich List" in Beijing, on Oct. 19, 2012. Wang Zhao/AFP via Getty Images

News Analysis

A newly released list of China’s 100 richest people indicates that the total wealth of entrepreneurs, in particular fortunes in Internet technology, diminished significantly. Experts believe that this may be related to the overall economic decline and that their assets would be further reduced from a future trend.

Compared with the year before, the total wealth of entrepreneurs on the list dropped 18 percent, to 24.5 trillion yuan ($3.38 trillion), according to the annual China Rich List in 2022, released on Nov. 8 by Hurun Research Institute.

There are 11 percent fewer, or 1,305 Chinese entrepreneurs with personal wealth of 5 billion yuan ($690 million) or more, on the list. The number of entrepreneurs, 1,187, saw their wealth diminish or remain stagnant, with 293 of them falling off the list this year. Only 411 entrepreneurs grew richer, including 133 newcomers.

Over the past year, the wealth of Chinese entrepreneurs on the list—impacted by the Russia–Ukraine war, the U.S. Federal Reserve’s sharp interest rate hike, and the recurring COVID epidemic—dropped, in 2022, for the fifth time in 24 years, and that the total number of rich people on the list has fallen and that it is also the largest decrease, according to Rupert Hoogewerf, chairman and chief research officer of Hurun Research Institute, Chinese financial media Security Times reported on Nov. 9.

Internet Technology Private Entrepreneurs’ Wealth Dwindles

The survey found that the wealth growth of Chinese entrepreneurs is slowing down and that tycoons engaged in Internet platforms are the most affected in terms of the amount of wealth decline.

Qin Rupei (2nd-L), deputy secretary of Guizhou province, and Ma Huateng (C), chairman and chief executive officer of Tencent Holdings Ltd., attend the 2017 China International Big Data Industry Expo at Guiyang International Eco-Conference Center in Guiyang, China, on May 28, 2017. Tencent is the largest Chinese web portal in China. Lintao Zhang/Getty Images

Among the top 10 billionaires, notably, Ma Huateng, chairman of the board and CEO of multimedia conglomerate Tencent, saw his wealth drop by 102 billion yuan ($14 billion), or 32 percent, to rank fifth, with 215 billion yuan ($29.6 billion), down one place from last year, his lowest ranking in a decade.

In addition, Alibaba Group founder Jack Ma’s wealth fell by 75 billion yuan ($10.3 billion), or 29 percent, to rank ninth with 180 billion yuan ($24.8 billion) while the Chinese e-commerce company Pingduoduo founder Huang Zheng’s wealth fell by 59 billion yuan ($8.1 billion), or 26 percent, to rank 10th with 170 billion yuan ($23.4 billion).

Frank Tian Xie, a John M. Olin Palmetto Chair Professor in Business and Professor of Marketing at the University of South Carolina Aiken, told The Epoch Times on Nov. 9 that Chinese technology tycoons are mainly from the most advanced Internet technology, high-tech enterprises. The value of these enterprises, profits, and benefits of e-commerce that they generated are all linked to the nation’s economy and the consumption power of residents.

“If the overall economy declines and people are short of money, then online shopping will decrease and these companies will depreciate accordingly. So, it is clear that Internet technology tycoons’ shrinking wealth would be blamed on the economic recession and the Communist Party’s crackdown on these private businesses,” Xie said.

He believes this shrinkage of wealth will continue as China’s economy is basically going back to the way it was. “It’s going back to a closed-door state, where state-owned enterprises monopoly the economy and the private sector is being stifled. In that case, the wealth of the once-emerging rich people will be diminishing.”

Beverage, Health Care, and Pig Breeding Lead the Way to Wealth

Hoogewerf said that the rich’s wealth in traditional industries, however, increased significantly this year, suggesting beverage, health care, and pig breeding lines.

Zhong Shanshan, the founder of Nongfu Spring, China’s largest bottled water maker, has become the richest man in the nation. His wealth grew by 65 billion yuan ($8.9 billion) over last year, bringing his total wealth to 455 billion yuan ($62.7 billion).

Zhong’s wealth is even beyond the combined wealth of the second and the third richest men, setting a record high in more than two decades in the Hu Run 100 Rich List.

Zhong is not merely engaged in the beverage industry but also controls Wantai Biological Pharmacy Enterprise Co., a maker of hepatitis vaccines and Covid-19 test kits, according to a Financial Times report in 2020.

The second richest is Zhang Yiming, the founder of Chinese Internet technology company ByteDance, the owner of TikTok. Due to the company’s devaluation, Zhang’s wealth dropped by 28 percent, or 95 billion yuan ($13.1 billion), to rank second, unchanged from last year.

In third place is Zeng Yuqun, president and executive chef of Chinese new energy technology company CATL, with a total wealth of 230 billion yuan ($31.7 billion), down 90 billion yuan ($12.4 billion), or 28 percent, from last year.

China’s largest pig breeder, Qin Yinglin, has overtaken Jack Ma for the first time.

Qin is the founder and chairman of Muyuan Foodstuff based in Henan Province. In the Hurun 100 list, Qin and his wife’s wealth increased by 9 percent over last year, to 185 billion yuan ($25.5 billion), moving them up seven spots, to eighth place.

“It is natural for the wealthy in traditional industries to rise because there has been a bubble on the Internet and e-commerce companies,” said Xi, explaining that the global Internet technology is facing headwinds, with many relevant enterprises laying off employees on a large scale.

In China, once this bubble is burst, it will show a shrinking of wealth in the high-tech sector, then other traditional industries or non-high-tech will be affected, such as food, health care, and poultry and livestock breeding; resource-related industries will stand out, Xie added.

Official Media Takes Stake in Private Internet Giants

There is no doubt that tightened censorship and restriction would be partially responsible for the decline in the wealth of the private tech-rich, with the Chinese Communist Party (CCP) fearing that the growth of the Internet has allowed news and opinion to spread from within China to the rest of the world.

Gearing toward making the Internet its propaganda tool, the official media tried to gain access to some technology giants by acquiring stakes to influence their decisions.

According to a Nov. 6 report of Chinese official media, Kuaishou, a notable Chinese short-video sharing platform, on Oct. 26, conducted strategic financing with the investment of Beijing Radio and Television Station, which is a direct subsidiary of the Beijing Municipal Committee and Government.

Beijing Radio and Television Station control 1 percent of Kuaishou’s shares, as shown by Tianyancha, a Chinese corporate information searcher.

A download page for the TikTok app is displayed on an Apple iPhone in Washington, D.C., on Aug. 7, 2020. Photo Illustration by Drew Angerer/Getty Images

Earlier in 2021, ByteDance’s 1 percent stake was held by China Internet Investment Fund Management Co. Ltd., which is established by the Central Cyberspace Affairs Commission and the Ministry of Finance and partly controlled by a multimedia company of mouthpiece CCTV, as said Chinese official media cited by Reuters, on Aug. 17, 2021.

Douyin and its overseas version of TikTok are the main short-video sharing apps produced by ByteDance.

Despite holding only 1 percent of the shares, either Beijing Radio and Television or CCTV, with a Communist background, will still have a special management stake with “one vote veto,” said Xie.

In January 2017, the Office of the Central Committee and the State Council stated that special management units should be launched in the areas of Internet news and information services, online publishing services, and information network transmission and audiovisual program services on a pilot basis. In May of the same year, the State Internet Information Office issued regulations to “implement a special management unit system for eligible Internet news and information service providers.”

The so-called special management shares in publishing and media enterprises is a system in which state-owned capital transfers revenue rights and a certain degree of operating rights to attract capital while maintaining the highest decision-making power, and the government has “one vote to veto” on specific matters, according to an article published in May 2017 on Beijing-based Science-Technology and Publication.

“It is obvious that the Chinese Communist Party is preparing for the next mergers and acquisitions with the 1 percent stake. It will demand to participate in the board meetings and even suppress the board …Who would dare to oppose it? Who would dare to oppose the representatives of the Party on the board of directors? So basically, it can control these companies.” Xie continued.

“The CCP is not confident and trusting of private enterprises, and it is jealous of their wealth, revealing the Party’s nature of robbery and banditry, so it will seize this wealth by force.”

The CCP’s “aim is to hold the lifeblood of the Chinese economy, state-owned enterprises, and central enterprises, in its own hands,” Xie added.

Ellen Wan contributed to this report.