Hello again Global Impact readers,
The last year was a good time for the world’s richest people to get even richer.
While the coronavirus pandemic upended many peoples’ lives and severely damaged the global economy, the well-to-do were able to take advantage of the rapidly changing opportunities and avoid the many pitfalls that resulted from the global health emergency.
But the rise in wealth of the rich also increased the income gap with the rest of the population, exacerbating a series of problems that have dogged society for years.
This week, Eugene Tang, who heads the business desk here at the SCMP, takes a closer look at how the wealthy fared and the impact of the rising wealth gap on Hong Kong.
Senior Editor, Political Economy
Let them eat cake? The rising fortunes of the wealthy highlight societal problems
The richest people on the planet got even richer over the last year, even as the world’s worst public health crisis is poised to claim its 3 millionth life.
China’s capital city, the seat of power for the ruling Communist Party, surpassed New York - the paragon of market capitalism – as the city with the most US dollar-denominated billionaires last year, according to Forbes’ annual rich list released on April 7.
Beijing added 33 US dollar billionaires in 2020, and now is home to 100 of these ultra-wealthy people, narrowly beating out New York, which added seven billionaires last year and currently hosts 99, according to the 2021 Forbes World’s Billionaires List.
The “Big Apple” lost its No. 1 ranking for the first time in seven years, according to Forbes. This is Beijing’s first top ranking, a testament to the speed at which the capital of the world’s second-largest economy bounced back from the coronavirus pandemic, the magazine said.
A buoyant stock market that has benefited technology industries in particular, as well as China’s more resilient economy and its quick containment of the pandemic, boosted the fortunes of these billionaires. The combined net worth of New York’s billionaires, however, remained US$80 billion greater than that of their counterparts in Beijing.
Technology and social media moguls from the US and China dominated the list of the world’s wealthiest self-made billionaires who are under 40 years old, according to the 10th edition of the ranking produced by Hurun Research Institute. Beijing’s richest resident was Zhang Yiming, the founder of social media sensation TikTok and chief executive of parent firm ByteDance, who saw his net worth double to US$35.6 billion. In contrast, Michael Bloomberg, New York’s richest resident, had a fortune worth US$59 billion.
Defying the trend is Zhong Shanshan, the chairman of bottled water dispenser Nongfu Spring, who topped most wealth ranking surveys with a fortune estimated at US$68.5 billion. The entrepreneur, 66, was briefly Asia’s wealthiest person, eclipsing India’s Mukesh Ambani.
Collectively, Hong Kong’s wealthy residents are feeling the pinch after a series of events that devastated the local economy, according to analysts and new data, while their mainland Chinese counterparts go from strength to strength.
Figures released in February by Hurun Report showed the number of US dollar millionaires in Hong Kong fell in 2019 as the city was brought to a virtual standstill by a mass protest movement. It was the only Chinese city in Hurun’s top 10 to report a lower number in the period.
One in every 125 of Hong Kong’s residents had net assets exceeding US$5 million, excluding property, according to a survey by Wealth X. The city was ranked fifth globally in density of very rich people, according to the survey. Li Ka-shing, known as “Superman” by Hong Kong residents for his deal-making prowess and his nose for investments, topped the city’s ranking as the richest tycoon. Coincidentally, a luxury apartment at 21 Borrett Road built by his flagship company CK Asset Holdings sold in February for HK$459.4 million through tender, which sets the record as the most expensive address in Asia by price per square foot.
The increase in the numbers of the very rich spurred developers to rise to cater to their whims and expensive fancies. One of the most outlandish projects to emerge in Hong Kong was a HK$4 billion (US$514 million) mansion proposed by China Evergrande Group near the city’s border with Shenzhen, boasting 240,000 square feet (22,230 square metres) of living space, equivalent to 180 medium-sized flats at Taikoo Shing, the city’s largest housing estate. With the average living space of 200 square feet per person in Hong Kong, this one mansion alone, with eight bedrooms and four private lifts, will have enough space to fit 1,200 people.
That concentration of wealth stands in stark contrast to the immense poverty at the underbelly of Hong Kong society, with one in five Hongkongers living below the government’s poverty line in 2018. The yawning wealth gap, combined with a host of social issues from the unaffordability of housing to the lack of universal suffrage, contributed to the outpouring of grievances that led to the anti-government protests in 2019.