FT

Opinion Chinese business & finance

It’s no longer glorious to get rich in China — it’s dangerous

Why no one wants to be the nation’s top tycoon any more

Last month, Colin Huang, founder of ecommerce powerhouse PDD, attracted the usual headlines when he rose to become China’s richest man. But shortly after, PDD surprised investors with a downbeat profit forecast. Its stock plummeted. Huang lost $14bn overnight, and ceded the top spot to Zhong Shanshan, founder of beverage giant Nongfu Spring. Within 24 hours, Nongfu Spring issued its own unexpectedly depressing outlook, and Zhong, too, soon slipped from first place on the rich lists.

On Chinese social media, chatter broke out about whether corporate leaders might be competitively devaluing their own stock prices to avoid the widening crackdown on excessive wealth, which is a centrepiece of leader Xi Jinping’s “common prosperity” campaign. It is not implausible to conclude, wrote one Wall Street broker, that “nobody wants to be the richest man in China” at a time when its government is turning more assertively socialist.

Whatever the true motive for these profit warnings, the way they were spun on Chinese social media reflects a real change in the national zeitgeist. When Deng Xiaoping became paramount leader in the late 1970s, he defanged the old Maoist hostility to wealth creation. To get rich would be “glorious” in his increasingly capitalist nation.

But there was a catch. It was glorious to get rich — just not too rich. China was generating far more wealth than other developing countries, yet its largest individual fortunes remained modest compared with those in much smaller economies, including Nigeria and Mexico. Even during the roaring boom of the 2000s, an unwritten cap seemed to remain: no single fortune would rise much higher than $10bn. China’s billionaire list was also unusual for the high rate of churn in its top ranks.

By the early 2010s, at least two tycoons had seen their net worth approach that decabillion-dollar barrier, only to land in jail on corruption charges instead. That is not to say the charges were baseless, only that the choice of targets did appear to reflect a lingering, levelling tendency among China’s leaders.

That instinct flowered anew under Xi. Coming to power in 2012, he launched a campaign against corruption that reached deep into the elite. The early targets were often public sector bigwigs — bureaucrats, Communist party princelings. With China’s economy slowing, the regime seemed reluctant to scare the one private-sector goose still laying golden eggs: big tech companies. Over the years, many Chinese would build fortunes bigger than $10bn. The first three to breach that threshold, and keep rising, were tech industry founders led by Jack Ma of Alibaba.

This quiet tolerance would turn in 2020, during the stimulus-driven market boom. China added nearly 240 billionaires — twice as many as the US — but late that same year Ma made a speech that helped bring this party to a halt. In a guarded but unmistakable critique, Ma questioned the direction of Communist party rule, warning that overregulation threatened to slow tech innovation, and that Chinese banks suffered from “pawnshop thinking”.

State retaliation was swift. Alibaba’s share price collapsed. Ma tumbled down the rich lists and dropped out of public view. Early the next year, Xi launched his common prosperity campaign and the crackdown spread to any company deemed out of step with its egalitarian values.

In this new era, it’s dangerous to get too rich. Stories abound of the state launching investigations against this business figure or that financier. The pressure is drying up venture capital funds, scaring the young away from lucrative professions such as investment banking. The number of millionaires leaving China has been rising and peaked last year at 15,000 — dwarfing the exodus from any other nation.

The private sector is in retreat. Since 2021, the stock market has been sliding, but state companies have grown their share of total market cap by more than a third to nearly 50 per cent. China now has the world’s only major stock market in which state-owned companies are valued on par with those in the private sector. Individual fortunes have shrunk dramatically over the past three years; the number of billionaires has fallen 35 per cent in China, even as it rose 12 per cent in the rest of the world.

China’s super-rich increasingly choose to lie low. Become the richest tycoon in the US and you might launch your own space programme. In India, you might throw gazillion-dollar weddings for your children. In China, you might look for a way to lose your new title — and the target on your back.

xi-lib-tears

  • Arbiter@lemmy.world
    link
    fedilink
    arrow-up
    11
    arrow-down
    33
    ·
    2 months ago

    The Chinese state like all states reflects purely the will of the state.

    For example, I don’t think slaughtering protesters at Tiananmen Square was reflecting the will of the working class.

    What it was reflecting was the will of the state to preserve its own power.

    • davel@lemmy.ml
      link
      fedilink
      English
      arrow-up
      20
      arrow-down
      4
      ·
      2 months ago

      States don’t just run themselves; the class that in is control drives the agenda.

      Literally no one died in Tiananmen Square itself, the people who did die (outside of the square) were not “massacred,” and many of them were unarmed police and military. The whole event was not what we were told.

      • Arbiter@lemmy.world
        link
        fedilink
        arrow-up
        3
        arrow-down
        16
        ·
        2 months ago

        You argue both that there was no massacre and that violent force against the protesters was justified if it did happen.

        Seems like one is meant to excuse the other if disproven.

        But I shall play the smallest violin for those poor unarmed tanks killed by violent protesters and their terrifying grocery bags.

        • GarbageShootAlt2@lemmy.ml
          link
          fedilink
          arrow-up
          19
          ·
          edit-2
          2 months ago

          You argue both that there was no massacre and that violent force against the protesters was justified if it did happen.

          Seems like one is meant to excuse the other if disproven (Edie is also innocently mistaken in its reading)

          He is plainly saying that the violence that happened was not a massacre.

          But I shall play the smallest violin for those poor unarmed tanks killed by violent protesters and their terrifying grocery bags.

          It’s wild that you do the tank man meme after you get linked footage showing that tank man a) did not get run over and b) was blocking tanks from leaving the square.

          But davel wasn’t talking about that conflict when he was talking about state actors being slaughtered, he was talking about unarmed soldiers being burned to death by petrol bombs and then having their corpses strung up for display as the first shots fired in the conflict between the violent insurrectionists hiding among the protestors and the military.

          • Arbiter@lemmy.world
            link
            fedilink
            arrow-up
            1
            arrow-down
            10
            ·
            2 months ago

            At no point did I say the tank man was run over.

            I’m not sure many people even claim he was.

            • GarbageShootAlt2@lemmy.ml
              link
              fedilink
              arrow-up
              14
              ·
              2 months ago

              You insinuated that there was violence between the two. Like, if I talk about “the poor IDF soldier who was terrorized by children with stones” everyone knows that the irony behind the statement is that the IDF soldier inflicted incomparable violence on the children in that situation. What is not suggested by your remark is that the tanks behaved appropriately by stopping and not threatening the man.

              You’re just being obtuse in the fashion of a vulgar debatebro.

            • Salph@infosec.pub
              link
              fedilink
              arrow-up
              6
              ·
              2 months ago

              Really? You don’t see how “poor unarmed tanks killed by violent protesters and their terrifying grocery bags” falsely implies the tanks acted violently?

              What were you trying to say by that sentence then? Just a meaningless remark?

        • davel@lemmy.ml
          link
          fedilink
          English
          arrow-up
          17
          ·
          edit-2
          2 months ago

          violent force against the protesters was justified if it did happen.

          I said nothing of the sort.

          violent protesters and their terrifying grocery bags…

          You didn’t look at the photos of the beaten soldiers or their charred, hanged bodies. You didn’t read about the self-proclaimed desire for extreme violence by some of the protest leaders, nor of the CIA’s involvement.

          • Arbiter@lemmy.world
            link
            fedilink
            arrow-up
            1
            arrow-down
            12
            ·
            2 months ago

            Your second point literally says exactly that. You’re inching as close to justification as you can while maintaining plausible deniability.

            Echos the exact same mentality of holocaust denial claims that the Jews were both a dangerous evil and simultaneously treated with utmost dignity.

            • davel@lemmy.ml
              link
              fedilink
              English
              arrow-up
              15
              ·
              2 months ago

              I’m still doing no such thing, while you, by comparing this to the holocaust, are perpetuating the myth that all of the protesters and all of the rioters were innocent bystanders who were mowed down indiscriminately.

            • GarbageShootAlt2@lemmy.ml
              link
              fedilink
              arrow-up
              13
              ·
              2 months ago

              Instead of engaging with sources, you’re trying to pigeonhole this into a ridiculous Holocaust comparison like every atrocity propagandist does.

              There were four broad categories of people: The PLA, violent insurgents, civilian protestors (who were there for many different reasons), and also uninvolved bystanders (it’s still the capitol of the country after all). There were something like 300 deaths in the area, consisting of members of each of these groups, though I don’t know the relative numbers offhand.

              No one is denying that civilians died. No one is arguing that those civilians should have died. This is very clear and you’re the one being slippery by hinting vaguely at “inching closer” and “plausible deniability” and so on. It’s shameful behavior.