[Economist has an article on the legitimacy of private wealth in China. The article highlights the risks of being rich, especially for those with their names on the Forbes list. ]
The stigma of wealth in China
Original sin
Sep 3rd 2009 | HONG KONG
From The Economist print edition
China debates whether its richest citizens earned their fortunes fairly
MOST Chinese assume it is something of a mixed blessing to appear in the annual rankings of China’s wealthiest citizens published by Forbes magazine. Early this year a novel with the title “The curse of Forbes” was syndicated in a Chinese magazine before being published as a book. Anyone on the list, its protagonist warns, is “dead meat”. The rankings are widely known as “pig-killing lists”—a reference to the fate the authorities are thought to have in mind for those who appear on them. In a review of the book, Forbes reflects on the fact that many people on its Chinese lists have indeed been detained or arrested, and asks whether “anyone in China is safe from the curse”.
The answer, new research suggests, is yes. Rupert Hoogewerf, the author of Forbes’s first Chinese list, which appeared ten years ago, and now publisher of a competing version called the Hurun Rich List, looked at what has happened to the 1,300-odd people who have featured in it. Two await trial, ten are currently under investigation, seven have been investigated but not convicted, seven have fled China, and six have died (including two suicides and one murder). Eighteen have ended up in jail, which may sound like quite a toll, but amounts to less than 2% of the names on the list—not so outlandish a proportion, Mr Hoogewerf argues.
Nonetheless, many still wonder whether wealth in China is inextricably tied to crime and corruption, the “original sins” that are thought to have underpinned the rise of many of the country’s most lucrative ventures. That question was the subject of a 20-page article published last week in Kan Tian Xia (“View the world”), a magazine based in Beijing, which cited Mr Hoogewerf’s findings. Mr Hoogewerf himself points out that many of the crimes committed by China’s tycoons date back to an earlier era, when credit was harder to obtain and corporate governance cruder (see table). New wealth, particularly in areas where venture capital plays a big part, such as technology, is subject to closer scrutiny these days. He maintains that the stigma associated with wealth in the past, sometimes deservedly, has lifted in recent years.
But China’s tycoons continue to get into trouble. Shortly before “The curse of Forbes” appeared, it emerged that Huang Guangyu (also known as Wong Kwong Yu), a retailing magnate who was first on Hurun’s list last year and second on Forbes’s, had disappeared. He was subsequently reported to have been detained in a wide-ranging bribery probe. In June the mayor of Shenzhen, a big city near Hong Kong, was detained in what was thought to be the same probe. On August 31st Hopson Development, a property firm, revealed that for the past six months it had been unable to account for its own chairman, Chu Mang Yee (140th on the Forbes list, and tenth on Hurun’s), although the link to the probe, if any, is unclear.
The majority of people who have posted comments on other websites about the Kan Tian Xia article seem suspicious of successful businessmen. Tellingly, the government’s internet censors have let these comments proliferate, suggesting that it takes a similar view. One blogger argued that the vast majority of those on rich lists had escaped jail simply because they had bribed officials to stay out of it. “Even our children know you cannot succeed without dirtying your hands,” another added. A third had an even grimmer view: “Remember that any enterprise that is big will, eventually, become the government’s property.” It is not always the tycoons who are the crooks.