China has 568 billionaires, compared to 535 in the United States. The Hurun Report suspects that the number of Chinese billionaires is actually higher because many don’t like being in the spotlight. These quiet billionaires are even referred to as vampire billionaires by western media. Because people outside of China know it as a communist country, some may be wondering how there are so many billionaires in China. They mistakenly think there can’t be wealthy people in a communist country. Here are three reasons China has its share of citizens who have hit 10 figures:
#1 Deng Xiaoping Encouraged Economic Reforms in China
One of the biggest reasons China became a fertile environment for billionaires is the policy change initiated by Deng Xiaoping, a Chinese statesman, that enabled more private ownership and unequal wealth distribution in China. Deng Xiaoping became famous for saying “That it is glorious to be rich” and led the way for numerous economic reforms in China.
#2 China Integrated Hong Kong and Macao Back into Their Country
Another factor making it easier for billionaires to form in China is they integrated Hong Kong and Macao back into their country. During the 1990s, Hong Kong and Macao were returned to China from Britain and Portugal respectively. Because Hong Kong and Macao were accustomed to different systems and had a good amount of foreign trade, China chose not to entirely socially reform the territories, and instead using them as seeding labs for ideas to be taken back to the mainland.
#3 Nixon’s Historic Visit to China Opened Relations
In 1972, U.S. President Nixon visited China and successfully opened up relations to the United States. Nixon ended a 25-year period of unwillingness to work together between the two countries. He was even the first U.S. President to visit China. This helped China prosper because they had an abundance of labor resources that the U.S. and the European Union were interested in. Since then the cooperation had only increased.
Over the past few decades, China has undergone several economic reforms. China doesn’t keep a choke hold on its citizens like some foreigners think, but the country still remains involved in creating and maintaining a fair, encouraging environment in which their citizens can prosper.
Most of China’s billionaires are either in the government or have close relations with politicians. In general, a Chinese citizen must start his own business and sell shares to the public to achieve a dream of becoming a billionaire. The only catch is he must respect the laws and rules of engagement to stay in business. Breaking the laws and rules, even as a business owner, is taken seriously in China.
Contact us for expert advice on setting up a business in China that is in compliance with government regulations. Anyone can become wealthy in China as long as he follows the rules.
If you are interested in knowing more about China, download the first free chapters of my book here.