According to Forbes, Beijing is now home to 100 billionaires, overtaking New York City. The Chinese capital gained 33 billionaires in 2020 but what has happened to cause this?

New York City is the home of 99 billionaires with Beijing taking the top spot with 100, ending New York’s seven year run at the top. While the number of billionaires is now higher in Beijing, New York’s still have a greater combined net worth of US $560.5 billion in comparison to Beijing’s US $484.3 billion.

The richest person in China, at rank 13, is Zhong Shanshan with a net worth of US $68.9 billion. Zhong started his career as a struggling journalist before quitting in 1988 to get into business. He then farmed prawns and sold turtle pills until 1996 when Zhong founded a bottled water company that is now known as Nongfu Spring. By 2012, Nongfu Springs was the number one seller of packaged beverages in China. The company’s first initial public offering in September 2020 made Zhong’s wealth almost triple from $18.9 billion to over $50 million.

Zhong Shanshan | Credit: The Independent

The richest person in the US is still, you guessed it, Jeff Bezos. He needs no introduction as to how he earned his wealth. Everybody knows about Amazon, so I won’t bore you with the details.

Interestingly enough, Zhong isn’t a good example to explain why China has gained so many new billionaires. There has been a massive boom in e-commerce thanks to the pandemic. Tech giants got even bigger as more and more people began shopping online and went looking for sources of entertainment online.

In China, six of the top ten billionaires are related to e-commerce, delivery or internet media. So, it isn’t surprising to see someone like Zhang Yiming, chairman of TikTok, in the number seven spot in China (number 39 overall).

Zhang Yiming | Credit: South China Morning Post

What Zhong is a good example of is the role of IPOs in the generation of so much added wealth. China’s stock market has been soaring and there have been a flood of initial public offerings. As an added example, Jack Ma, co-founder and former executive chairman of Alibaba saw his fortune increase by 45% as a result of an IPO of the fintech giant Ant Group.

So, pairing an e-commerce boom with a flood of IPOs can help explain what is going on in China and why so many billionaires have showed up in Beijing.

However, muddying the waters a little is the inclusion of Hong Kong in the overall figures for China. Whether or not they should be counted is a matter for another time, but if we accept Hong Kong’s inclusion then those figures state that China has added more billionaires to the list than any other country, with 210 newcomers. Overall, China now has 698 billionaires while the US still leads with 724 billionaires, according to Forbes.

Hurun Report chairman and chief researcher, Rupert Hoogewerf told CNBC, “The world has never seen this much wealth created in just one year. China’s entrepreneurs have done much better than expected. Despite Covid-19, they have risen to record levels.” The Hurun Rich List measures wealth differently to other reports and they have counted a total of 880 billionaires in China in comparison with the US’s 788. It should be noted that the Hurun Report is heavily favoured in China.

Rupert Hoogewerf | Credit: CGTN

While many people have been struggling during the pandemic, billionaires it seems have had it much easier (no surprises there). Their fortunes have all hit record highs. The 1% saw their wealth grow 27.5% to US $10.2 trillion from April to July 2020. Sad to think especially given the World Bank reported that extreme poverty is set to rise for the first time in over two decades because of the pandemic.

It’s interesting data that depending on who you are is either good news, bad news, or just news.