Daily Blog
Saturday, 17 October 2009 11:10
Written by JFK Miller

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The annual Hurun China Rich List  is one of the most eagerly awaited events on China's media calendar. Rupert Hoogewerf, the report's founder, publisher and chief researcher, admits that valuing the wealth of China’s richest is as much an art as it is a science. But his list, now in its tenth year, is the most serious attempt yet to measure the wealth of China’s top entrepreneurs. The former British chartered accountant and his team of researchers cross-check information with industry experts, bankers, regulators and the entrepreneurs themselves. We spoke with Shanghai-based Hoogewerf about his 10 years of tracking China's super-wealthy.

How would you say the report is received in China now compared to the first one in 1999?
I would say the image of wealth 10 years ago in China was such that if you were wealthy you were considered corrupt. There were really just people who made their money through guanxi. I would compare it to how people view North Korea today. Are there rich people in North Korea? Sure. How did they make it? Well, they got to know the president of North Korea. They were basically close to power and make their money off that power. But the image of wealth in China now is much more entrepreneurial. If you made it to the top of the rich list, I think you should be pretty proud of that. And I think most people would now consider these entrepreneurs to be very savvy operators who deserve a lot of respect for being able to build a business that has, for instance, 10,000 employees.

Has anyone ever ask to be removed from the list?
Yes. Not so much called me after, more like trying to say beforehand that they didn't want to be on the list. Ten years ago they didn't really want to be in the public eye. But the general trend now is that Chinese entrepreneurs are much more self-confident compared with 10 years ago.

How do China's rich compared with those on, say, Britain's Sunday Times rich list?
The entrepreneurs in China are all first generation. In Britain the Duke of Argyle, for instance, can trace his roots back to the year 600. If you go through The Sunday Times rich list you see that the focus is less on entrepreneurs, it's more on aristocrats. But in China's there's no old money. Everyone started from the same point, although some were born into families with connections and were able to leverage those connections to get their first break.

What's been the greatest rags-to-riches story over the last 10 years?
I have to say the BYD story is an amazing story, this year's number one (Wang Chuanfu, founder and chairman of Chinese battery and car maker BYD). He's not a typical entrepreneur. He doesn't do property. He does cars. He made his money through doing rechargeable batteries, took on the Japanese at their own game and beat them. Then moved into cars just six years ago at a time when the whole international car industry was beginning to grind to a halt and he's now the best selling car manufacturer in China by volume. I'd also say that waste paper queen, Cheung Yan, is amazing because she's a woman who has made it in business in an environment which is male dominated. She's also the largest exporter by volume from the US – full stop. She fills all the containers that go to the US with toys and products from China. They used to come back empty, except that now she fills up all containers with scrap paper which she processes and sells it to Chinese exporters who then use it for television boxes and the like.

And riches-to-rags?
Well, this year you've seen the story of Huang Guangyu (the chairman of electronics retailer Gome, now in detention for financial irregularities). He was our number one last year. I remember thinking last year, he's only 39 years old, give him another 20 years and how big is he going to be…it's all part of the urbanization mega trend. In the next 15 years they estimate there will be another 300 million people moving into the cities from the countryside. You buy yourself a house, you then have to fill it with air-conditioning units and fridges. That's why Gome and Suning, both massive electronic retailers, have done incredibly well.

Your quirkiest billionaire?
We had a crocodile farmer in south China. He had the largest crocodile farm… leather and meat. He's no longer on the list. The crocodiles ate so much food they put him out of business. He had something like 30,000, 40,000 crocodiles, which is a lot of crocs. This year someone fell off the list because they got divorced, the settlement cost him a mint. I've been looking for the sex toy manufacturers, who apparently have 90 percent of the world's sex toy market. But it's very difficult to find the king of porn and value him.

You also publish the Hurun Philanthropy List. Is philanthropy something we've seen a rise in among the highly affluent?
Yes. I mean, the interesting part is that the top donor, the top giver, in China has not even given the average of our rich list. The average of our rich list is something like 40-50 million US dollars and yet the most generous known philanthropist in China has not even given that… which is very surprising. In the US and UK you've got people who have donated a billion here, a billion there, whereas in China you've got nobody near that.

Wang Shi (CEO of Shenzhen-based property developer Vanke), for instance, was heavily criticized for giving only a small amount to the Sichuan earthquake victims…
Which is correct. I think this is a very interesting point. It shows how social responsibility, how people's expectations of these entrepreneurs, has shifted. Such that, you're a big fish, you should dig deeper into your pocket. If you do it quietly in private, that's no longer good enough. You need to been seen to be doing it. It's all about social responsibility. You need to be showing that you as a person, or possibly as a corporation, are doing these things in public.

Read this year's Hurun China Rich List here

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