China: The Orient Excess

2012, Economics  -  27 min Leave a Comment
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What impact the super rich are having in China and what is their prominence and ostentation saying about the Communist Party's complicated attitude to capitalism? Young entrepreneurs are the reflection of Chinese society today. Only two things count: money and success. You can never have enough money. Money helps them fulfill their dreams. China's new rich spend their money well. For evidence you need look no further than the luxury fairs, constantly running across the country.

By 2015 China will replace Japan as the largest single market for luxury goods. By then, Chinese spending on luxury items is estimated to reach more than €20 billion per year. The potential luxury goods market in China is huge. There are 1.3 billion people in China. If only 1 out of 10 of them was rich the business with luxury goods would have 130 million potential customers. The trends are convincing, the numbers of Chinese millionaires is increasing rapidly, as other ranks of the super rich. Only the United States is home to more billionaires than China.

Wang Dafu manages the 500th richest firm in China. His fortune is estimated to be around €0.5 billion. Wang was born into a poor family. It's a story that's fast becoming the Chinese dream, taking him less than 15 years to become the undisputed property czar on the resort island of Hainan. Certainly not the kind of project he expected to achieve as a young boy.

When he was little, if he had chicken legs he didn't want to eat them all at once. They were so valuable; he would wrap them again and again. When he started working, he could sometimes afford a beer and a bowl of noodles. That was a luxury for his family and they were happy. At the beginning he used to earn $26 a month. He use to work as a day laborer in factories. Then he became an agent. He sold oil, fertilizer and clothing. He really has done many things. Modesty is not Wang Dafu's thing. He is proud of his success and his personal wealth. Right now that includes hotels, supermarkets, marinas and entire neighborhoods in Hainan.