China’s wealth obsession

Billionaire has mid-life crisis and runs off with young mistress. It’s a story that repeats itself time and time again, all over the world.

But not like this.

Chinese high society has been fascinated over the last few weeks by the extraordinary break-up of the marriage of billionaire investor Wang Gongquan, who took the extraordinary step of announcing he was leaving his wife for a woman 15 years her junior on Sina Weibo, the Chinese version of Twitter.

“I am giving up everything and eloping with Wang Qin,” Wang said on his Sina Weibo account.

“I feel ashamed and so am leaving without saying goodbye. I kneel down and beg forgiveness!”

The message, posted on May 16, was republished 60,000 times within 24 hours.

On May 30, Wang added to the drama by posting a video of himself walking along the shore of an unidentified body of water, singing a song he penned himself called Ode to Elopement.

You can see the video here. The Wall Street Journal’s China Real Time Report translated the lyrics like this:

Always facing the whispers of the wind with a heart longing for love,
I loathe nothing more than labouring for profane achievements.
Who has ever seen mountains of gold and silver
last through 10,000 generations?
Throughout the ages,
the only precious thing is this feeling.
A bright moon in the clear sky,
starlight accompanies me.
Events of the past
waved away like smoke.
Passionate about love, disdaining wealth,
Riches and rank worth the same as dirt.
My hands clasped, laughing, in a bow to this profane world,
I dance through the vast sky.

Not surprisingly, the video (and a subsequent one) has gone viral, creating discussions about marriage, privacy and the power of social media.

But the drama also highlights the incredible amount of attention the Chinese give to the wealthy. There’s a good reason for that – their ranks are growing exponentially.

According to a new report by Capgemini and Merrill Lynch, the number of millionaires in China grew by 12% to 535,000 in 2010, propelling the Asia-Pacific region past Europe to become home to the second-largest population of wealthy people, with a total of 3.3 million millionaires. North America leads the way, with 3.4 million millionaires.

Australia helped boost the Asian region. The number of millionaires in Australia jumped by 11.1%, according to Capgemini and Merrill Lynch, with total numbers now at 192,900. And we’re still punching well above our weight in terms of wealth – we might contribute just a few percentage points of global GDP, but we are home to the ninth-largest population of high-net-worth individuals in the world.)

The report also underlines China’s growing influence on the sector of the economy that sells goods and services to the rich.

Mercedes Benz sales jumped 112% in China and Hong Kong in 2010. Ferrari’s sales climbed 50%. Demand from China and Hong Kong helped push jewellery and watch sales at auction house Christie’s to a record $US91.2 million.

According to Forbes, the number of billionaires in China surged from 64 to 115 in 2010 as the rich surfed the country’s economic growth rate of 10%. 

What’s really interesting here – and perhaps is this is why the lovelorn songs of billionaires attract so much attention – is that these fortunes are so new.

As Bill Gates said at a news conference in Shanghai last September: “The thing that’s unusual is that 30 years ago, there really weren’t people of great wealth, so what you have is first-generation fortunes.”

Nearly every wealthy entrepreneur has a brilliant story behind them.

The eloping Wang Gongquan is a great example.

The businessman quit his job as a provisional public servant in 1988 and made his first fortune in property development with the company Vantone International Group. In 2002, he founded a venture capital and private equity firm called CDH Investments, which now manages $US3.5 billion in funds and has a reputation for investing wisely. So much so that Wang has previously been named one of China’s top-10 entrepreneur investors.

Some other great rags-to-riches stories have recently been unearthed by author and filmmaker Nick Rosen in a series for the BBC.

One of those profiled, Zong Qinghou, started his Wahaha beverages empire with a shop in a school selling vitamin drinks and icy poles. Two decades later, his company commands 15% of China’s soft drinks market.

Yet Zong remains a man whose habits are frozen in China’s austere past – he lives on just $20 a day.

“My only exercise is doing market research… my only hobbies are smoking and drinking tea,” he told Rosen.

Or take Zhou Xiaoguang, who has turned her company Neoglory into one of the world’s leading costume and fashion jewellery companies.

Zhou left school at 16, and started out selling trinkets and on China’s night train. She built her business, got her MBA at the age of 35 and is now part of a $US3 billion jewellery industry in her home town of Yiwu.

There are, of course, plenty of questions surrounding China’s wealth explosion.

Can these billionaires and millionaires hold onto their wealth if the economy slows or turns down? Will the wealthy elite become as powerful or more powerful than China’s political elite? If democratic unrest were to increase, on which side would billionaires line up? How will the wealthy handle the transition of wealth to the next generation?

But these are questions for another day. Right now, Chinese society only has one question it needs answered: Will Wang Gongquan’s new marriage really last?