Why Chinese billionaires are on the decline
Plus: Azerbaijan to open an embassy in Israel, Taiwan holds local elections, and controversy hits the US-Africa Summit guest list.
Hi there Intriguer. We’re back, and what better way to return to your inboxes than with the news that rats enjoy the music of Lady Gaga? Not only that, but the little critters are one of the few animals that can “hold a beat” (though after watching the video, we think the scientists are being extremely generous to the rats).
Today’s briefing is a ~4.9 min read:
- 💸 Diminishing wealth: Why there are fewer Chinese billionaires this year than last.
- ➕ Plus: Azerbaijan to open an embassy in Israel, Taiwan holds local elections, and controversy hits the US-Africa Summit guest list.
PS: Our survey closes this Wednesday. So head here to give us your two cents and be in the running to win some prizes!
📰 GLOBAL HEADLINES
🤿 DEEP DIVE
China’s billionaires are getting poorer
- The number of billionaires in China and their overall wealth declined significantly this year.
- Amongst the many causes are a slump in China’s real estate sector, a crackdown on the tech sector, and President Xi’s push for ‘common prosperity’.
A new protected category
The number of Chinese billionaires (and their fortunes) is on the decline. While it’s too early to pop them on the WWF’s endangered list, more than 300 of China’s uber-rich fell off this year’s ‘Hurun Rich List’.
- Analysts at Forbes think the drop in aggregate wealth was even more significant, falling 18% from $1.48T in 2021 to $907.1B this year.
What’s behind the fall?
Put simply, the value of many assets in China has decreased. The fate of China’s wealthiest people is unsurprisingly linked to the country’s economic prospects, and China’s economy is currently going through a rough patch.
1. 🏡 A real estate slump
China’s real estate sector is experiencing delays, defaults, and falling sales, severely impacting one of the country’s leading growth engines.
- Over the past year, the stock of China’s most prominent developer fell by over 20% – and it wasn’t even the worst hit.
According to economist Michael Pettis, the sector is set to undergo “a substantial downward adjustment that has barely begun.”
2. 💻 A government crackdown on tech
China’s billionaire-heavy tech sector is in the crosshairs of Beijing’s regulators. The clampdown has wiped billions off China’s rapidly expanding but previously loosely-regulated tech industry.
- Analysts Chang Che and Jeremy Goldkorn sum up the situation:
3. ✌️ Common prosperity policy
President Xi Jinping has vowed to “adjust excessive income” to help advance China’s ‘common prosperity’ and redistribute the country’s wealth.
- Not wanting to anger the powerful Xi, the super-rich donated a record US$10B over the last year, while the ten richest Chinese gave away 6.3% of their combined wealth, according to the South China Morning Post.
Average wages are rising, for now
Before you shed a tear for China’s rich listers, average annual wages in China are rising.
However, China’s economy is facing significant headwinds going into 2023, so the good wage-growth news may be short-lived.
Oh, and you might be surprised by who China’s richest person is… It’s not Zhang Yiming, founder of Bytedance, Ma Huateng, founder of Tencent, or even Jack Ma, the infamous founder of Alibaba. It’s Zhong Shanshan, a former prawn farmer turned founder of the ‘Nongfu Spring’ bottled water brand.
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🔦 REGIONAL SPOTLIGHT
North & Central Asia
Coronavirus cases in China have hit a record high since the beginning of the pandemic.
- The new surge in cases will force Beijing to decide on the future of its zero-covid policy, but many analysts aren’t convinced China will open up in the short term.
Three ministers have resigned from Prime Minister Fumio Kishida’s Cabinet in less than a month, undermining his already shaky government.
- According to a poll conducted last week, Kishida enjoys an approval rating of only 30.5%, the lowest number since he took power last year.
Azerbaijan will become the first Muslim Shi’ite country to open an embassy in Israel.
- The two countries have fostered close trade ties: Azerbaijan is a significant source of energy imports for Israel, while Israel provides Azerbaijan with weapons.
🇰🇷 South Korea
South Korea’s President Yoon Suk-yeol has pledged to boost the country’s weapons and defence technology exports.
- Yoon identified the defence industry as “a new future growth engine”, and aims to make South Korea the fourth biggest arms exporter in the world.
Taiwan mid-term local election results are in, and it ain’t looking pretty for President Tsai Ing-wen or her Democratic Progressive Party.
- Tsai resigned as leader of the party in the wake of the elections, though she will continue to serve as president until her term ends in 2024.
🗞 IN OTHER NEWS…
The controversial guest list
The news: The US has unveiled its guest list for the upcoming US-Africa Leaders Summit, and it has already caused a stir.
- The summit will be held in mid-December and is a crucial opportunity for the US to make good on its promises of deeper cooperation with the African continent.
Deja-vu: The Biden Administration is once again under fire for who did and didn’t make the cut to one of its summits:
- Earlier this year, the US opted to exclude Cuba, Venezuela, and Nicaragua from the Summit of the Americas, prompting several Latin American leaders to boycott the conference.
Toeing the line: The US wants to host an inclusive summit without rewarding undemocratic or criminal behaviour from governments. Unfortunately, that’s a difficult balance to strike.
- Of the leaders expected to attend the conference, at least three have been accused of war crimes or crimes against humanity, and others are part of a military junta.
- Burkina Faso, Guinea, Mali, and Sudan have all been excluded due to their recent coups d’etat.
The criticisms: It’ll be crucial for the US and its foreign policy ambitions to maintain clear but flexible standards for diplomatic engagement.
- As former US Assistant Secretary of State for Africa Tibor Nagy noted:
🤏🏽 STORIES WE ALMOST COVERED
More than 100 Intriguers voted for us to cover the following story!
The UAE meddles in US politics
- According to US intelligence, the United Arab Emirates employed a series of legal and illegal methods to influence US foreign policy in its favour.
- The UAE exploited a series of vulnerabilities of the US political system, such as a reliance on campaign donations and its powerful lobby establishment.
The bottom line: We’re used to geopolitical rivals meddling in each other’s businesses, but the UAE is one of the US’s closest allies in the Middle East, which is why the report grabbed headlines.
Some things to think about:
- The US is by far the biggest arms exporter to the United Arab Emirates, as shown by the SIPRI Arms Transfers Database.
- A senior UAE official called for the US to offer “codified and unambivalent” security guarantees.
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