The country's wealthiest people are growing even richer amid furious construction, but good news for those at the top could spell bad news for everyone else as the income gap grows and social discontent increases. Daniel Bardsley, foreign correspondent, reports
As new skyscrapers climb higher into the sky over China, wealth in the country has soared, with tycoons in construction cashing in on the boom.
Leading the way is Liang Wengen, 55, the chairman of Sany Heavy Industry, which makes piledrivers and other key equipment for the building industry.
In a remarkable double coup this week, Mr Liang was named China's wealthiest person in the Hurun Rich List, published on Wednesday, and the Forbes China Rich List, which came out yesterday.
The Hurun and Forbes league tables respectively value Mr Liang at US$11 billion (Dh40.4bn) and $9.3bn, with most of his fortune tied up in a 58 per cent share of Sany, which has doubled in value during the past 12 months.
"Even though the stock market is going down, the wealth of the most successful people in China is going up," says Russell Flannery, a senior editor and Shanghai bureau chief for Forbes magazine.
Just behind Mr Liang in the Hurun Research Institute list is Zong Qinghou, 66, whose $10.7bn net worth comes from his drinks company, although he is only fifth in the Forbes magazine ranking, which estimates his wealth at $6.5bn.
Li Yanhong, 43, a co-founder of the Chinese search engine Baidu, is third in the Hurun rankings with $8.8bn, and second on the Forbes list with $9.2bn. This year, Baidu cemented its position as the leading search engine in China after Google pulled out of the mainland.
"The internet is becoming increasingly influential, and everyone recognises that, and I think we have the same goal, which is to make the industry healthy," says Jennifer Li, the chief financial officer at Baidu.
Still, it is the dominance of property magnates that really stands out, with five of the remaining seven members of Hurun's top 10 owing all or most of their fortunes to that sector.
"The high GDP growth rate simply gives a big platform and a lot of room for people to find new businesses," says Mr Flannery.
Indeed, in a statement, Hurun described construction, along with retail, as "the key drivers for growth in wealth".
According to the Chinese list, there are now 271 dollar billionaires in the country, up from 189 last year.
But because many tycoons like to keep their fortunes a secret to reduce their tax bill, the true number could be as high as 600, says Rupert Hoogewerf, the chairman and chief researcher of Hurun.
With China's urban population increasing by 13 million a year, and property one of the most popular investment opportunities, the property sector has enjoyed considerable expansion.
The dominance of property magnates on China's rich list follows a pattern seen in other Asian economies, says Chau Kwongwing, a professor in the department of real estate and construction at the University of Hong Kong.
"People in this business, particularly in the early stages, are likely to run a huge profit," he says. "In Japan in the 1970s and '80s, the rich people were also in the real estate business. It's a general phenomenon for Asian countries during the early stages. As the economy matures, the situation may be different."
The Beijing authorities have tried various measures to prevent overheating in the property sector, including restrictions on lending, and some analysts have predicted a slowdown in construction.
But with urbanisation expected to continue, prospects remain positive, despite calls by Wen Jiabao, the Chinese premier, to restrict housing prices.
"We must unswervingly curb irrational housing demand, continue to strictly implement differential housing loans, tax policies and restrictions on purchases," Mr Wen wrote in Qiu Shi magazine, an official publication.
Yet that is unlikely to hit Sany's profits in the short term. The company was founded in 1989 and was listed on the Shanghai Stock Exchange eight years ago. According to media reports, it could be the subject of an initial public offering in Hong Kong in the near future.
Sany makes machinery used in road building, excavation and port operations, as well as construction, and all these areas have benefited from the billions of dollars China has pumped into infrastructure projects.
The company also manufacturers turbines for the wind power industry, which last year achieved 70 per cent growth in China, reaching 45 gigawatts.
"China's relentless construction boom coupled with a growing domestic retail market have been the key drivers for the growth in wealth," Forbes said.
While the rise in the number of billionaires in China has been spectacular, it brings into sharp focus the increase in inequality that has accompanied the country's economic boom over the past three decades.
Deng Xiaoping, the architect of "socialism with Chinese characteristics" and former leader, is reputed to have said that "to get rich is glorious" and some places should be allowed to "get rich first".
Yet even if officials have given their blessing, disquiet over inequality is starting to rise.
"I think it's a reflection in a bit of a sea change in Chinese society right now," says Mr Flannery. "There's a lot of concern in China about the wealth gap."
To underline the point, the Gini coefficient, a measure of inequality in which zero represents complete equality and one indicates extreme inequality, is believed to have reached about 0.47 in China.
A figure above 0.40 is a cause for concern, analysts say.
"[Inequality is] the biggest concern in China right now," says Simon Fan, a professor in the department of economics at Lingnan University in Hong Kong. "[This is a] potential threat to the government."
A key problem has been the increase in house prices, which have forced young graduates into grimy areas with rock-bottom rents.
"They cannot really live in cities. That could be the trigger point," Prof Fan says.
But finding affordable housing is unlikely to be a problem for Mr Liang and China's other construction magnates.
"In the short term, there may be a slowdown in construction as a whole but … there's still a lot of things to build in the future. In infrastructure there's still a long way to go," says Prof Chau.
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UAE currency: the story behind the money in your pockets
McLaren GT specs
Engine: 4-litre twin-turbo V8
Transmission: seven-speed
Power: 620bhp
Torque: 630Nm
Price: Dh875,000
On sale: now
More coverage from the Future Forum
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
THE BIO
Ambition: To create awareness among young about people with disabilities and make the world a more inclusive place
Job Title: Human resources administrator, Expo 2020 Dubai
First jobs: Co-ordinator with Magrudy Enterprises; HR coordinator at Jumeirah Group
Entrepreneur: Started his own graphic design business
Favourite singer: Avril Lavigne
Favourite travel destination: Germany and Saudi Arabia
Family: Six sisters
COMPANY%20PROFILE
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
What is the definition of an SME?
SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.
A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors.
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
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How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
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The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
RESULTS
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Company%20Profile
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How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
UAE currency: the story behind the money in your pockets
T20 World Cup Qualifier fixtures
Tuesday, October 29
Qualifier one, 2.10pm – Netherlands v UAE
Qualifier two, 7.30pm – Namibia v Oman
Wednesday, October 30
Qualifier three, 2.10pm – Scotland v loser of qualifier one
Qualifier four, 7.30pm – Hong Kong v loser of qualifier two
Thursday, October 31
Fifth-place playoff, 2.10pm – winner of qualifier three v winner of qualifier four
Friday, November 1
Semi-final one, 2.10pm – Ireland v winner of qualifier one
Semi-final two, 7.30pm – PNG v winner of qualifier two
Saturday, November 2
Third-place playoff, 2.10pm
Final, 7.30pm
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Abaya trends
The utilitarian robe held dear by Arab women is undergoing a change that reveals it as an elegant and graceful garment available in a range of colours and fabrics, while retaining its traditional appeal.
The specs
Engine: 3.0-litre 6-cyl turbo
Power: 374hp at 5,500-6,500rpm
Torque: 500Nm from 1,900-5,000rpm
Transmission: 8-speed auto
Fuel consumption: 8.5L/100km
Price: from Dh285,000
On sale: from January 2022
RESULTS
Catchweight 82kg
Piotr Kuberski (POL) beat Ahmed Saeb (IRQ) by decision.
Women’s bantamweight
Corinne Laframboise (CAN) beat Cornelia Holm (SWE) by unanimous decision.
Welterweight
Omar Hussein (PAL) beat Vitalii Stoian (UKR) by unanimous decision.
Welterweight
Josh Togo (LEB) beat Ali Dyusenov (UZB) by unanimous decision.
Flyweight
Isaac Pimentel (BRA) beat Delfin Nawen (PHI) TKO round-3.
Catchweight 80kg
Seb Eubank (GBR) beat Emad Hanbali (SYR) KO round 1.
Lightweight
Mohammad Yahya (UAE) beat Ramadan Noaman (EGY) TKO round 2.
Lightweight
Alan Omer (GER) beat Reydon Romero (PHI) submission 1.
Welterweight
Juho Valamaa (FIN) beat Ahmed Labban (LEB) by unanimous decision.
Featherweight
Elias Boudegzdame (ALG) beat Austin Arnett (USA) by unanimous decision.
Super heavyweight
Maciej Sosnowski (POL) beat Ibrahim El Sawi (EGY) by submission round 1.
If you go
The flights
Emirates flies from Dubai to Funchal via Lisbon, with a connecting flight with Air Portugal. Economy class returns cost from Dh3,845 return including taxes.
The trip
The WalkMe app can be downloaded from the usual sources. If you don’t fancy doing the trip yourself, then Explore offers an eight-day levada trails tour from Dh3,050, not including flights.
The hotel
There isn’t another hotel anywhere in Madeira that matches the history and luxury of the Belmond Reid's Palace in Funchal. Doubles from Dh1,400 per night including taxes.
Reading List
Practitioners of mindful eating recommend the following books to get you started:
Savor: Mindful Eating, Mindful Life by Thich Nhat Hanh and Dr Lilian Cheung
How to Eat by Thich Nhat Hanh
The Mindful Diet by Dr Ruth Wolever
Mindful Eating by Dr Jan Bays
How to Raise a Mindful Eaterby Maryann Jacobsen
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Indoor Cricket World Cup
Venue Insportz, Dubai, September 16-23
UAE squad Saqib Nazir (captain), Aaqib Malik, Fahad Al Hashmi, Isuru Umesh, Nadir Hussain, Sachin Talwar, Nashwan Nasir, Prashath Kumara, Ramveer Rai, Sameer Nayyak, Umar Shah, Vikrant Shetty
FINAL SCORES
Fujairah 130 for 8 in 20 overs
(Sandy Sandeep 29, Hamdan Tahir 26 no, Umair Ali 2-15)
Sharjah 131 for 8 in 19.3 overs
(Kashif Daud 51, Umair Ali 20, Rohan Mustafa 2-17, Sabir Rao 2-26)
