Still think China is a miracle never seen in history? Well, how is this for corruption, bubbles and income gaps… oh, and remember all those luxury brands (Burberry, Ferraris and Rolexes) making record profits in China? This is the source of their revenue…

According to a recent Bloomberg article, the richest 70 members of China’s legislature added more to their wealth last year than the combined net worth of all 535 members of the U.S. Congress, the president and his Cabinet, and the nine Supreme Court justices. The net worth of the 70 richest delegates in China’s National People’s Congress, which opens its annual session on March 5, rose to $89.8 billion in 2011, a gain of $11.5 billion from 2010, according to figures from the Hurun Report, which tracks the country’s wealthy. That compares to the $7.5 billion net worth of all 660 top officials in the three branches of the U.S. government. Poor congress!

But here is the amazing thing: in China per capita annual income in 2010 was a “dirt-poor” $2,425, less than in Belarus and a fraction of the $37,527 in the U.S. So what’s the source of a big chunk of this money? According to Bloomberg, “illegal land grabs and corruption”.

Private entrepreneurs in bed with the Chinese government…

Former President Jiang Zemin pushed for the inclusion of wealthy private entrepreneurs into the Communist Party a decade ago. Now they have regular access to top party leaders who are also NPC members.


Zong Qinghou, chairman of beverage-maker Hangzhou Wahaha Group and China’s second-richest person, with a family fortune of 68 billion yuan, is a member. So is Wu Yajun, chairwoman of Beijing-based Longfor Properties Co. She has family wealth of 42 billion yuan, according to the Hurun Report. Many of the NPC’s richest members, including Longfor’s Wu, are executives in real estate, a sector that has spurred protests and contributed to the rising wealth gap between city dwellers and farmers.

“The prevalence of billionaires in the NPC shows the cozy relationship between the wealthy and the Communist Party,” said Bruce Jacobs, a professor of Asian languages and studies at Monash University in Melbourne, Australia. “In all levels of the system there seem to be local officials in cahoots with entrepreneurs, enriching themselves, and this has led to a lot of the demonstrations.”

Source: Bloomberg, Hurun

Share →