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Beijing’s regulatory assault on the Chinese tech industry has reduced the net worth of the industry’s richest tycoons by $ 87 billion since early July, hitting the fortunes of tycoons such as Tencent’s Pony Ma and Pinduoduo’s Colin Huang.
The combined net worth of the two dozen Chinese tech and biotech billionaires whose holdings are tracked by Bloomberg has fallen 16% since the Didi Chuxing rideshare platform went public in the United States in late June, according to Financial Times calculations.
The $ 4.4 billion listing, which the company launched despite private warnings from Chinese authorities to delay it due to data security concerns, was followed by a regulatory storm. Beijing has sought to tighten its grip on an industry that has helped transform the world’s second-largest economy, causing the stock prices of China’s biggest tech groups to plummet.
Huang, founder of e-commerce site Pinduoduo, was the hardest hit with paper losses of $ 15.6 billion, or one-third of his wealth. Pony Ma, founder of Internet group Tencent, has lost more than $ 12 billion, or 22% of his fortune. He is now ranked third richest man in China behind Jack Ma, founder of rival company Alibaba.
Jack Ma’s fortune fell by $ 2.6 billion during the same period, but has fallen by nearly $ 13 billion since authorities canceled the initial public offering by Ant Group, the platform. form of financial technology that he controls, in November.
The founders of the country’s major tutoring companies saw their wealth crumble by China’s announcement last month that groups would have to restructure into nonprofits. Yu Minhong, founder of New Oriental Education, saw the value of his 12% stake in the tutoring company drop from $ 3 billion to just $ 500 million.
On the other hand, billionaires who operate in sectors considered by investors as less risky or even supported by Beijing have seen their fortunes soar in recent weeks.
“We have seen a realignment of wealth creation,” said Rupert Hoogewerf, whose research firm Hurun Report has chronicled the rise of Chinese billionaires in recent decades.
China has more than 1,000 billionaires, double the number five years ago thanks to the proliferation of successful tech groups, he added. But after the recent wave of regulatory action, “savvy entrepreneurs are changing course.”
Among the beneficiaries are Zhong Shanshan, leader of the Nongfu Spring bottled water empire, who overtook Jack Ma and Pony Ma as China’s richest person last year. Zhong’s wealth stands at just over $ 72 billion, up about $ 5 billion since the end of June. He’s about $ 24 billion richer than Jack Ma.
China’s nine richest auto industry tycoons were spurred on by the country’s top executives who expressed support for the sector as it focuses on electric vehicles. They have added $ 22 billion to their collective net worth since July. The fortune of Wang Chuanfu, chairman of BYD, a Berkshire Hathaway-backed automaker and pioneer of electric batteries, jumped from $ 4.4 billion to over $ 25 billion, making him the tenth richest person in the world. country.
The eight billionaires who dominate the fast-growing renewable energy sector also saw their net worth collectively increase by $ 13.6 billion during the period.
Analysts say there is little reason to expect Beijing to soften tech moguls – or falter in its support for automakers and renewable companies – in the second half of 2021.
Bruce Pang, head of research at investment bank China Renaissance, said investors and entrepreneurs were increasingly paying attention to the Communist Party’s policy statements.
He pointed to President Xi Jinping’s comments in a speech to entrepreneurs last month that “thoughts and actions must be aligned with the party’s analysis, judgment, decision-making and planning”.
“This means that businesses and entrepreneurs will have to keep a close eye on [the party’s] comments and movements, ”Pang said.
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