- 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.