The ranks of China’s ultra-wealthy in its legislature swelled 20 per cent this year, highlighting the vested interests that may oppose any measures by incoming President Xi Jinping to reduce the nation’s wealth gap.
The ranks of China’s ultra-wealthy in its legislature swelled 20 per cent this year, highlighting the vested interests that may oppose any measures by incoming President Xi Jinping to reduce the nation’s wealth gap.
Ninety members of the National People’s Congress are on a list of China’s 1000 richest people published by the Shanghai-based Hurun Report, up from 75 last year, according to a review of the data by Bloomberg News.
Everyone on the Hurun list had a fortune of at least 1.8 billion yuan ($282.7 million), more than former Republican presidential candidate Mitt Romney.
The growing presence of wealthy people in the legislature coincides with efforts by Xi to stem corruption and the public display of luxury by officials as he seeks to address concern the Communist Party no longer represents interests of ordinary Chinese.
Xi’s task may become more difficult as the rich move to cement their gains through legislation, said Yang Fengchun, an associate professor of government and management at Peking University.
“The National People’s Congress has a lot of rich businesspeople who have the knowledge and the means to make laws, and that’s a privilege the rest of society doesn’t have,” Yang said. “The common people believe that they can’t protect the rights of the weak.”
Most powerful people
While the NPC, which is now in session in Beijing, historically has served to rubber-stamp measures prepared by the Communist Party, it is the supreme organ of the Chinese government and brings together the most powerful people in China under one roof every March. Xi himself is a delegate as are incoming Premier Li Keqiang, other members of the ruling Politburo, provincial leaders and chief executives of state-run and private companies.
The combined net worth of the 90 NPC members was 637 billion yuan. The concentration of wealth in the NPC was calculated by comparing the list of 2987 delegates against data from the Bloomberg Billionaires Index and the Shanghai-based Hurun Report’s Hurun Rich List 2012, which was released in September. Hurun Report publishes a luxury-goods magazine that tracks China’s affluent.
The richest member of the NPC - and China’s wealthiest person - is Hangzhou Wahaha Group chairman Zong Qinghou, 67, who has a fortune of $US17.1 billion, according to the Bloomberg Billionaires Index. Zong, a Communist Party member, said in a 2010 interview he opposed a property tax, which could bring local governments additional revenue.
This year, Zong submitted at least 10 proposals to the NPC including measures to make low-income housing more affordable and cut taxes on companies and ordinary people, according to an e-mailed list provided by his company.
“China’s economy will continue to develop quickly so there will be more rich people,” Zong told reporters March 5 at the opening NPC session, when asked if he thought there were too many billionaires in the legislature.
Also on the NPC is Pony Ma, the co-founder of Tencent Holdings, a games and social-network operator. Ma has a $US7.2 billion fortune, according to the Bloomberg Billionaires Index.
“Billionaires only account for a small percentage of NPC delegates,” Ma said March 5 at the Great Hall of the People where the NPC is being held. “This year is the first time that internet guys were invited to attend.”
Joining Ma as a first-time NPC delegate is Liu Yonghao, chairman of poultry supplier New Hope Liuhe, with assets of at least $US3.7 billion, according to the Bloomberg Billionaires Index data.
‘Normal’ practice
“It’s normal that businessmen are chosen as delegates,” Liu told reporters. “There are some entrepreneurs like us coming from the common people by our own efforts.”
Fu Ying, the spokeswoman for the National People’s Congress, didn’t reply to a faxed question about the rise in the number of billionaires in the body sent March 5.
The 90 richest Chinese on the NPC represent 3 per cent of the 2987 delegates. Their average fortune is $US1.1 billion.
By comparison, the wealthiest 3 per cent of the 535 members of the US House of Representatives and Senate - 16 people - have an average net worth of $US271 million, according to figures from the nonpartisan Center for Responsive Politics, a Washington-based group that tracks money in politics.
American disclosure forms ask officials to list asset values within a range, rather than specific amounts. The $US271 million number is an average of the maximum figures.
Income gap
China’s income gap as measured by the Gini coefficient was 0.474 in 2012, statistics bureau data showed in January, above the 0.4 level used by analysts as a gauge of the potential for social unrest. China says the gap has narrowed for four straight years. The income gap in the US was 0.463 in the US in 2011.
China’s State Council approved a blueprint last month to boost minimum wages to at least 40 per cent of average salaries and increase spending on education and affordable housing.
Many Chinese have also benefited from the country’s boom, with more than 600 million people lifted out of poverty since 1978, an achievement of “staggering proportions,” according to the United Nations. Last year, rural per-capita income rose 10.7 per cent and urban incomes rose 9.6 per cent, according to the National Bureau of Statistics.
“It’s not right to use wealth as a measure to determine if a person should be here or not,” said Guo Guangchang, a member of the Chinese People’s Political Consultative Conference who has assets of at least $US2.8 billion. “The NPC and the CPPCC were formed to represent all cross-sections of society,” said Guo, chairman of Fosun Group, whose businesses span steel, mining and property.
“Those who get rich first must help others get rich,” said Chen Guangbiao, chairman of China Huangpu Renewable Resources Utilization Group and a member of the CPPCC, the NPC’s advisory body. “The businessmen who are delegates must bear their duty to society,” said Chen, who is listed by Hurun as having 4.7 billion yuan in assets.
There’s no requirement for Chinese lawmakers or officials to publicly disclose their wealth. NPC delegates are chosen in their home provinces from lower-level people’s congresses.
In June, Bloomberg News reported that the wealth of Xi Jinping’s extended family included investments in companies with total assets of $US376 million; Hong Kong real estate worth $US55.6 million; and an 18 per cent indirect stake in a rare-earths company with $US1.73 billion in assets. The New York Times reported in October that the family of outgoing Premier Wen Jiabao had controlled assets of at least $US2.7 billion.
“We don’t know how the rich people get there to the highest organ in policymaking, how they made their exchange of wealth into political privilege and political power,” said Huang Jing, a political science professor at the National University of Singapore. “It never goes through a formal and transparent process.”