China week in review
Markets remain closed for National Day celebrations but the holiday sentiment helped lift markets last week
What industries produce the richest people in China?
A recently published Hurun Report about China's richest people gives us a rare glimpse of these wealthy but often elusive individuals. Hurun Report is similar to a Forbes list, providing statistics and research on the wealth and lifestyle of China's newly rich. While the exact net worth numbers are not always reliable given the lack of transparency in tracking personal assets in China, the list should give us a good idea which sectors have witnessed the most wealth creation in the past years.
Wang Chuanfu, the founder of Shenzhen-based BYD, which specialised in electric cars and mobile phone batteries, ranked as the richest person in China with a net worth of $5.1 billion, according to Hurun Report. BYD gained overnight fame in September 2008 when one of Warren Buffet's companies, MidAmerican Energy, bought a 10% stake in the Hong Kong-listed firm. Wang ranked only 103th on the list last year, with a net worth of $880 million.
The runner-up this year is Cheung Yan, the founder of paper company Nine Dragons Paper, with a net worth of $4.8 billion. She was the richest person in China in 2006. Industries that produce the richest people in China over the past ten years also include retail, real estate, Internet and agriculture.
Although per capita income in China remains low, the country now has over 8 million people with net worth exceeding $1.5 million, including 50,000 that are worth at least $15 million, according to the Hurun Report. Beijing, Shanghai and coastal provinces of Guangdong, Zhejiang and Jiangsu boast the most people with net worth of at least $1.5 million.
Market recap
The trading week was shortened to three days last week by the week-long National Day holidays, which started on Thursday. The Chinese stock exchanges will remain closed for much of this week as well. Over the last three trading sessions, the Shanghai Composite Index fell 2% to 2,779, while the Shenzhen Composite Index fell 1.6% to 11207. For the month of September, the Shanghai Index gained by 4%, while the Shenzhen Index lost 3%.
Macro and industry updates
September PMI up slightly to 54.3
The Purchasing Managers' Index (PMI) for September rose slightly from the August level of 54, indicating that the manufacturing sector remains in the expansion mode. The Index, compiled by the semi-official China Federation of Logistics and Purchasing, has stayed above 50 since March. The sub-indices of new orders, export and industrial output all improved from the prior month.
China lowered gas and diesel prices by CNY 190 ($28) per metric ton
In the seventh price adjustment since adopting the new pricing mechanism this January, China announced last week that retail gas and diesel prices will be cut by 2.5% and 2.8% respectively starting in October. The new prices will be CNY 6,620 ($969) per metric ton for gas and CNY 5,880 ($860) per metric ton for diesel. The last price adjustment was made less than a month ago.
