The changing nature of how China's wealthiest people are making their money, as shown by the Hurun Rich List released on Thursday, offers a chance to understand the changing driver of the country's economic growth over the past few years.
According to Rupert Hoogewerf, chairman and chief researcher of the Hurun Research Institute, 68 of China's 100 richest people were born after 1980 and most of them are internet entrepreneurs.
Since the report was first published in 1999, property tycoons have dominated the list until now. With the red-hot development of real estate over the following decade, all the top 10 richest people in China listed by the Hurun report were real estate developers. The golden decade the housing market experienced in China justified this, but such kind of wealth concentration in the real estate sector also exposed some intrinsic problems in China's economic structure.
True, the rapid domestic economic growth driven by a booming property sector considerably improved many people's housing conditions and boosted their wealth. However, the abnormal development of the housing market has increased the difficulties faced by low-income residents wanting to buy property. At the same time, the "siphon effect" of the housing market has exacerbated development imbalances among cities and the wealth gap between the rich and poor. This can also explain the country's accelerated efforts to promote economic transformation and wean its economic development off excessive dependence on the housing market.
The latest list of the richest people in China seems to show the country's efforts have achieved certain effects. That internet entrepreneurs dominate the list of the 100 richest people to some extent reflects the rise of the Internet Plus economy in China. Given that the internet industry is still developing and is incomparable in size to the colossal property market, the country should make efforts to promote the diversion of national wealth to more small and medium-sized business operators.
