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China’s complicated relationship with its super-rich

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  • Since Alibaba’s founder, Jack Ma openly criticized China’s financial policy in October 2020, the relationship between China’s state leaders and the super-rich is complicated
  • Zero-Covid and the crackdown on internet companies wreaked havoc on China’s 100 richest: their wealth plunged by 39 percent in 2022​
  • Private entrepreneurs are also under considerable pressure from the concept of “common prosperity” meant to redistribute wealth more equally.
  • Unsurprisingly, e-commerce and social media entrepreneurs have been hit hardest, including Ma Huateng (Tencent), Jack Ma (Alibaba), Huang Zheng (also Colin Huang/Pinduoduo) and Wang Wei (SF Express).
  • Compared to their international peers, China’s richest are not so “rich” – there is no Chinese national in the global top 10 and only 5 in the top 50 (compared to 24 from the United States)​
  • Common prosperity will further unfold as there are discussions and pilots to introduce property and inheritance taxes​
  • However, as long as the economic situation remains difficult, the government will be cautious to drive forward tax reforms​
  • As long as China’s wealthy support the ideology of Xi Jinping’s “new era” they will still be allowed to grow and prosper
  • Some of China’s rich decided to leave the country due to these developments, about 10,000 or 1 percent of high-net-worth individuals left China in 2022​

Sinolytics is a European research-based consultancy entirely focused on China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.

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