China 2.0

The Difference Between Chinese And Western Billionaires

A disproportionately high number of China's so-called "super-rich" came from real estate. It's the first clue about what's wrong with Chinese wealth accumulation.

RMB banknotes at Beijing's Bank of China
RMB banknotes at Beijing's Bank of China
Guo Yumei*

BEIJING â€" Technological and scientific innovation not only pushes forward economic development, but it also makes a few business leaders some big and fast money. Microsoft’s creative contribution in operating systems both promoted the rapid development of computers, and just as rapidly made Bill Gates very, very wealthy. He has remained, for most years over the past two decades, at the top of the Forbes list of the world’s richest men.

More recently, not only has Tesla’s powerful acceleration promoted the development of the environmentally conscious electric car, but it has also propelled Elon Musk to be one of the fastest accumulators of wealth on the Hurun Rich List.

Meanwhile, in China, the number of people with a net worth of at least two billion RMB ($305 million) has increased from ten in 2000 to as many as 1737 in 2015. Their combined wealth accounts for 9.2% of China’s total personal wealth.

It may seem like a similar story, but a closer look shows that the composition of China’s super rich is quite different from their peers in the West.

Most China’s wealthiest people come from the real estate sector

Thanks to the urbanization and industrialization of the past dozen years, the Chinese real estate industry has ushered in its golden age. Not only has real estate become the industry that was feeding China’s rapid growth, it has also created a huge batch of property developer tycoons. Out of the Chinese people who made it onto last year's Hurun Rich List, 107 of them come from the real estate sector. They make up 30% of China’s richest people on this global ranking whereas the richest people from the same business account for only about 5% in the U.S., Germany or Japan. And in a similarly developing country, India, only 4% of its richest men come from the property sector.

Real estate is not a technological and scientific innovation-oriented industry. At most, four aspects of real estate, development operation, planning and design, marketing strategy and property management, involve innovation. But even these are more about creative models and improvements of features than real technological and scientific innovation.

Factory power

Benefiting from the favorable conditions of a demographic dividend, globalization, and access to the World Trade Organization (WTO), China’s manufacturing industry has rapidly expanded since its reform and opening-up. Since 2010, China has overtaken the U.S. as the top global manufacturing superpower. This also created its own large share of billionaires.

Out of the Chinese people who make it onto the Hurun Rich List 2015, 61 of them come from the manufacturing sector. They make up 17% of China’s richest people, just after those from the real estate industry. In comparison, only 10% of the rest of the world’s billionaires on the list are from this sector.

And yet, China’s manufacturing industry mostly remains in low-value-added processing and assembly. It is still inadequately self-sufficient in high-value-added core technology innovation. In other words, China is still far in transforming “Made in China” into “Created in China”.

China’s manufacturing industry invests relatively little in Research and Development, just 2.2%, compared to 10.8%, 9.8%, 8.2% and 7.7% respectively in Japan, U.S., South Korea and Germany.

The steel industry and the household appliance industry are typical examples of China’s insufficiency in manufacturing innovation. Though the Chinese steel industry has long faced a serious problem of overcapacity, most of the country’s high-end steel demand for cold-rolled and electrical sheet steel is supplied by imports.

Again, though China has nurtured household electric goods giants Haier and Gree, they lag behind advanced countries in core and cutting-edge technology and have to use foreign production lines. This is clearly shown from the fact that, as China’s white goods leader, Haier has fewer than 5,000 patents, a figure dwarfed by the 48,000 of Samsung and more than 30,000 each for Panasonic and Sony.

No 2.0

TMT, which stands for technology, media and telecommunication, also encompasses the Internet and the emerging media-based industry linking high-tech with telecommunications. Big names in this sector include Microsoft, Google, Apple, Facebook, Epson and Samsung, and it is where a growing number of billionaires of innovation-oriented countries come from. In America, Japan and Germany the proportion of billionaires propelled by the TMT industry account for 23%, 38% and 18% respectively. In comparison, China has only 10% of its billionaires from the TMT sector which doesn’t even make it into the top three industries occupied by China’s wealthiest people.

In addition, numerous Chinese TMT industry leaders, such as Baidu, Alibaba, Tencent, and Xiaomi, still have a long way to go to improve their scientific and technological innovation capacity. Their quick rise has been largely due to the rapid spread of the Internet and China’s mass demographic dividend, instead of from owning leading technologies like their American peers. Here, we can return to the patent scales: Xiaomi owns a total of 352 international patents, while Apple owns 24,000.

*Guo Yumei is a professor at Renmin University's School of Economics.

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What It Means When The Jews Of Germany No Longer Feel Safe

A neo-Nazi has been buried in the former grave of a Jewish musicologist Max Friedlaender – not an oversight, but a deliberate provocation. This is just one more example of antisemitism on the rise in Germany, and society's inability to respond.

At a protest against antisemitism in Berlin

Eva Marie Kogel


BERLIN — If you want to check the state of your society, there's a simple test: as the U.S. High Commissioner for Germany, John Jay McCloy, said in 1949, the touchstone for a democracy is the well-being of Jews. This litmus test is still relevant today. And it seems Germany would not pass.

Incidents are piling up. Most recently, groups of neo-Nazis from across the country traveled to a church near Berlin for the funeral of a well-known far-right figure. He was buried in the former grave of Jewish musicologist Max Friedlaender, a gravesite chosen deliberately by the right-wing extremists.

The incident at the cemetery

They intentionally chose a Jewish grave as an act of provocation, trying to gain maximum publicity for this act of desecration. And the cemetery authorities at the graveyard in Stahnsdorf fell for it. The church issued an immediate apology, calling it a "terrible mistake" and saying they "must immediately see whether and what we can undo."

There are so many incidents that get little to no media attention.

It's unfathomable that this burial was allowed to take place at all, but now the cemetery authorities need to make a decision quickly about how to put things right. Otherwise, the grave may well become a pilgrimage site for Holocaust deniers and antisemites.

The incident has garnered attention in the international press and it will live long in the memory. Like the case of singer-songwriter Gil Ofarim, who recently claimed he was subjected to antisemitic abuse at a hotel in Leipzig. Details of the crime are still being investigated. But there are so many other incidents that get little to no media attention.

Photo of the grave of Jewish musicologist Max Friedlaender

The grave of Jewish musicologist Max Friedlaender

Jens Kalaene/dpa/ZUMA

Crimes against Jews are rising

Across all parts of society, antisemitism is on the rise. Until a few years ago, Jewish life was seen as an accepted part of German society. Since the attack on the synagogue in Halle in 2019, the picture has changed: it was a bitter reminder that right-wing terror against Jewish people has a long, unbroken history in Germany.

Stories have abounded about the coronavirus crisis being a Jewish conspiracy; meanwhile, Muslim antisemitism is becoming louder and more forceful. The anti-Israel boycott movement BDS rears its head in every debate on antisemitism, just as left-wing or post-colonial thinking are part of every discussion.

Jewish life needs to be allowed to step out of the shadows.

Since 2015, the number of antisemitic crimes recorded has risen by about a third, to 2,350. But victims only report around 20% of cases. Some choose not to because they've had bad experiences with the police, others because they're afraid of the perpetrators, and still others because they just want to put it behind them. Victims clearly hold out little hope of useful reaction from the state – so crimes go unreported.

And the reality of Jewish life in Germany is a dark one. Sociologists say that Jewish children are living out their "identity under siege." What impact does it have on them when they can only go to nursery under police protection? Or when they hear Holocaust jokes at school?

Germany needs to take its antisemitism seriously

This shows that the country of commemorative services and "stumbling blocks" placed in sidewalks as a memorial to victims of the Nazis has lost its moral compass. To make it point true north again, antisemitism needs to be documented from the perspective of those affected, making it visible to the non-Jewish population. And Jewish life needs to be allowed to step out of the shadows.

That is the first thing. The second is that we need to talk about specifically German forms of antisemitism. For example, the fact that in no other EU country are Jewish people so often confronted about the Israeli government's policies (according to a survey, 41% of German Jews have experienced this, while the EU average is 28%). Projecting the old antisemitism onto the state of Israel offers people a more comfortable target for their arguments.

Our society needs to have more conversations about antisemitism. The test of German democracy, as McCloy called it, starts with taking these concerns seriously and talking about them. We need to have these conversations because it affects all of us. It's about saving our democracy. Before it's too late.

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