China’s ‘Silicon Valley’ surpasses New York as home to billionaires

Shenzhen Building on Tuesday, March 15, 2022. The former fishing village, now a technology hub known as China’s Silicon Valley, has joined Beijing and Shanghai as the top three cities in the world for millionaires, surpassing New York for the first time this year.

Bertha Wang | Bloomberg | Getty Images

Three years ago, American entrepreneur Raj Oswal traveled to Shenzhen, China, on behalf of a client. He was so impressed that he left and started his own tech company.

“You won’t find many cities in China or around Asia that really embrace innovation like Shenzhen,” Oswal said, comparing moving from California to his father’s decision to leave India in the 1970s so he could continue his studies and move to the United States. A career.

Oswal described Shenzhen, a city of 17.5 million people on China’s southern border with Hong Kong, as a place full of “youthful optimism”.

Increasingly, it is also full of money. The former fishing village, now a technology hub known as China’s Silicon Valley, has surpassed New York for the first time this year, joining Beijing and Shanghai as the world’s top three cities for billionaires.

According to the Hurun Global Rich List, an annual ranking compiled by a private Shanghai-based company, Beijing is home to the world’s 144 richest people, followed by Shanghai at 121. Shenzhen has 113 billionaires, of which 110 are. New York, where London ranks fifth with 101.

The growing concentration of wealth is not news to the people of Shenzhen, which has added eight billionaires since last year.

“It’s almost a wake-up call for the rest of the world,” said Rupert Hugewarf, chairman of the Hurun Report and lead researcher at the organization behind the list.

Although the rankings may fluctuate, he said the growing number of billionaires in Shenzhen reflects a “megatrend” that will attract more young entrepreneurs to the city in the coming years.

“Shenzhen is a significant indicator of where it came from and where it is going,” he said.

Shenzhen’s rise began in 1980, when it was named China’s first special economic zone as part of the country’s “reform and opening up” under then-leader Deng Xiaoping. This allowed the city to experiment with market capitalism in an effort to attract foreign investment. From 1979 to 2021, Shenzhen’s gross domestic product grew from $ 28 million to about $ 475 billion less.

Today, the city is home to some of China’s largest technology companies, including telecom giant Huawei and Internet company Tencent, which inspire others to follow suit. Last year, 2,500 new state-recognized high-tech companies were set up in Shenzhen, bringing the total to 17,000, according to local government.

It is also part of what China calls the Greater Gulf, an integrated economic and business hub that aims to connect Shenzhen with the Chinese territories of Hong Kong and Macao and eight other cities in Guangdong Province.

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The opportunities were obvious to Oswal even though he drove a taxi from Shenzhen Airport after first arriving in 2019.

“All the stereotypes I had in Chinese cities have been shattered one by one with the modern and green urban landscape that has changed along the road,” he said.

Heng Chen, an associate professor of economics at the University of Hong Kong, said Shenzhen’s momentum was helped by the welcoming environment for entrepreneurs.

“The population structure is still very young compared to other super cities or first tier cities in China, so this is one of the reasons it is a very interesting place,” he said.

Also, Shenzhen government officials are committed to “abundant resources, financial resources to attract top talent from other countries of the world.”

But the city has also faced stiff challenges during the coronavirus epidemic, especially in recent weeks as China battles its worst outbreak in two years. The government’s zero-tolerance strategy relies on border closures, mass tests and strict lockdowns, and restrictions have delayed delays at Shenzhen’s factories as well as the world’s largest port.

During a week-long lockdown in Shenzhen last month, authorities allowed Apple supplier Foxconn Technology Group to resume some manufacturing activities using a “closed-loop” system that requires employees to be on site.

Shang-Jin Wei, a professor of economics at the Columbia Business School and former chief economist at the Asian Development Bank, said that despite the financial pressure of the epidemic, China’s economy was “partly because Chinese cities are too flexible.” “They can adapt to new situations.”

Wei added that Shenzhen offers favorable policies for high-tech companies, such as tax breaks.

As of January 14, there were 3,381 billionaires in the world, a net increase of 153 from the previous year, and their total wealth increased 4 percent to $ 15.2 trillion, according to the Hurun report. Of these, 1,133 are in China and 716 in the United States. In 2016, China surpassed the United States in the number of billionaires.

But China’s billionaires also suffered a “severe blow” last year, the report said, amid a regulatory crackdown on technology, education and other industries and the government’s “general prosperity” campaign promoting even more distribution of resources.

China lost 160 billionaires last year, more than any other country. Colin Huang, founder of e-commerce platform Pinduoduo, lost Nas 50 billion in assets to his Nasdaq-listed company. Xu Xian, chairman of the troubled asset developer Evergrande Group, said his company lost more than $ 23 billion due to missed bond payments.

Zhang Shanshan, founder of bottled water and beverage company Nongfu Spring, is China’s richest man with $ 72 billion in assets. ByteDance founder Zhang Eming, whose company owns the video app TickTock, is in second place with $ 54 billion. Right behind him is Zheng Yukun, founder of the electric-vehicle battery maker CATL, valued at $ 53 billion.

Tencent’s pony mom and technology giant Alibaba’s Jack mom, two of China’s biggest names in business, have both dropped out of China’s top three richest people for the first time since 2015. Pony Maa dropped to fourth place on the list as her wealth dropped to $ 52. Billion, then Jack Ma $ 37 billion.

Led by Tesla and SpaceX chief executive Elon Musk, there are no Chinese millionaires in the global top 10 with a net worth of more than 200 billion. Hughesworth says this is partly because Chinese billionaires run domestic businesses without a global focus.

Indian telecommunications tycoon Mukesh Ambani was the only Asian in the top 10 list, otherwise dominated by the United States and France. But he continues to change the title of Asia’s richest man, along with Indian infrastructure magnet Gautam Adani. According to Hurun, the two men, each with a net worth of about $ 100 billion, are ranked 10th and 11th on Forbes’ list of the world’s billionaires published this week.

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