Forbes and Hurun released a list of China’s wealthiest people in November. They have seen the most significant drop in their wealth in decades over the past year.

According to Forbes rankings, China’s 100 wealthiest people have seen their total wealth drop by $573 billion since last year. It plunged 39%. This is the most significant drop since the magazine began tracking the country’s wealthiest more than two decades ago.

The paper said, “Of the 100 names on the list, 79 were down, 12 were returnees, four had split fortunes, three were new, and only two were richer.”

Russell Flannery, the editor of the Forbes list of China’s 100 richest, said, “The past year has been one of China’s most difficult in recent decades, and overall wealth destruction among the top 100 on our list has been large by any measure.”

Also, in the Hurun ranking, the number of individuals with $10 billion has dropped by 29 to 56. The number of dollar billionaires is down about 20% from 1,185 to 946 this year.

With a minimum net worth of 5 billion yuan (about $702 million), only 1,305 people have reached the milestone this year, down 11% from last year. Their total assets are $3.5 trillion, down 18%.

Reuters cited Rupert Hoogewerf, chairman and chief researcher of research firm Hurun Report, which compiled the list, saying, “This year has seen the biggest fall in the Hurun China Rich List of the last 24 years.”

According to Nikkei Asia, Hurun calculates the wealth of tycoons based on their shares in listed institutions with an end date of September 15 every year. Unlisted company asset values are calculated based on a comparison with listed equivalent assets.

Reports say a combination of factors have contributed to the decline in wealth among Chinese entrepreneurs. This includes the impact of slowing economic growth in China. This is exacerbated by the country’s “zero-COVID” policies and the prolonged slump in the real estate market.

The situation is so severe that the International Monetary Fund forecasts China’s economy will grow only 3.2% in 2022. The Guardian said it is the slowest growth rate since the 1980s, except for the 2.4% rate influenced by the economic downturn of Covid-19 in 2020.

Global forces also contribute to the decline in the wealth of Chinese tycoons. The global economy has been hit hard by the war in Ukraine and the slow recovery from the pandemic.

The of Australia cited Hoogewerf saying, “E-commerce platforms, real estate, education, generic drugs, and vaping were the hardest hit.” He added, “The recent COVID outbreak across the country and increased tension with the U.S. combined … to see the steepest drop in value since the 2008 financial crisis, with many of China’s biggest companies shedding up to half their value.”

Hoogewerf concluded, “Other factors in play include continued anti-monopoly regulations, pressure on real estate borrowings, efforts to stem the falling birthrate, carbon emission targets and the recently introduced common prosperity theme.”

Indeed, China’s real estate sector, engulfed in an unending debt crisis, has significantly impacted this list.

The number of wealthy real estate people on the list continues to decline, falling from 50% 20 years ago to just 10% this year.

Leading the decline was businesswoman Yang Huiyan of developer Country Garden Holdings. She saw her fortune drop by the most significant amount of those on the 2022 list, dropping $15.7 billion. It is equivalent to 59% and she slid 36 places down to 47th place on the list.

Yang inherited the property when her father, the founder of Country Garden, Yang Guoqiang, transferred his shares to her in 2005.

Two years later, after the developer’s initial public offering in Hong Kong, she became Asia’s richest woman.

But now she, like many other Chinese property developers, is struggling with debt problems.

Meanwhile, the founder of the heavily indebted real estate company Evergrande, Hui Ka Yan, fell out of the top 100, dropping 102 places to 172.

He lost a staggering $17.2 billion.

Hui was once one of the wealthiest person in the country, but now the company is almost collapsing with $300 billion in debt.

The real estate woes probably started when the government applied the three red lines policy.

Over the past two years, the crackdown on the tech industry has also affected major Chinese tech stocks. Many of these are listed in Hong Kong, such as Alibaba and Tencent.

Accordingly, Chinese stocks have plunged in the past year. The Shanghai Composite index lost 12.6%, while Hong Kong’s Hang Seng index fell 33%.

Jack Ma, founder of Alibaba Group, was one of the tech bosses hit hard as his net worth fell 29% to $25.7 billion.

Ma was once considered China’s richest man, but his position dropped to ninth from fifth place last year.

Forbes said Ma appears to have become a government target. Some of the regime’s actions appear to be designed to reduce his influence and the power of his companies.

Tencent founder Ma Huateng, or Pony Ma, saw nearly a third of his fortune wiped out, and he dropped to fifth place with a $14.6 billion drop in wealth.

The Wall Street Journal said that Tencent has been struggling with slowing ad revenue and a downturn in its video game business due to tighter government regulations.

Zhang Yiming, founder of ByteDance Ltd., owner of TikTok, saw his net worth drop 28% to $35 billion. But he still took second place on China’s rich list.

Zhong Shanshan, chairman of Nongfu Spring Co., China’s largest bottled water supplier, is China’s richest person. He was awarded the title of China’s top billionaire for the second year in a row, with a net worth of $65 billion.

Forbes said that the tycoon has outperformed others on the list because of his investment in the supplier of COVID test kits, Beijing Wantai Biological Pharmacy.

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