Global Policy Forum

By David Barboza

The United States has more billionaires than any other country: 415 by Forbes's last count. No. 2, and closing fast? China. A year ago, there were 15 billionaires in China. Now, there are more than 100, according to the widely watched Hurun survey, and 66, according to Forbes. Unlike America's rich, China's are hardly famous, even in China. Gates, Buffett and Brin are known around the world. But Yang, Guo and Zhang? Yet, who they are, and what they decide to do - or are allowed to do - with their money and newfound influence will have political and economic consequences in China and probably far beyond, analysts say.

"They could start buying companies in the U.S.," Chang Chun, an economist at the China Europe International Business School in Shanghai, said of the new rich. "They have so much influence." Aptly, China's new billionaires are building their staggering wealth on the backs of the richest companies you have never heard of. Thanks to the capitalist stock mania sweeping the communist mainland, Chinese private and state-owned companies issuing stock for the first time are becoming incredibly valuable in speculators' eyes, sometimes overnight.

On Monday, the first day the state-owned energy company, PetroChina, listed shares on the Shanghai stock exchange, its market valuation - the value of all its stock combined, assuming that the value of a share in Shanghai translates to all shares globally - ran up to more than $1 trillion. Analysts are skeptical about the way China's stocks are valued, particularly those with huge amounts of untradable government shares, like PetroChina. But to the buyers in Shanghai, at least, it dethroned Exxon Mobil as the most valuable company in the world. And by the same criteria, they would consider China Mobile the world's most valuable telecommunications company. ICBC, a state-owned bank that was nearly insolvent a decade ago, is worth more than Citigroup to the speculators. A more stable measure of a hot stock prospect is the value investors place on its initial public offering. When Country Garden, a southern China real estate company, went public in Hong Kong in April, it raised more capital than Google, which took in $1.9 billion in 2004. PetroChina raked in $8.9 billion in capital in Shanghai the other day. ICBC raised about $21 billion last year in Hong Kong.

And on Tuesday, another newcomer, Alibaba.com, one of the biggest Chinese Internet companies, raised nearly as much as Google did. Afterward, the speculators sent Alibaba's stock soaring 193 percent on its first day of trading to a putative value of nearly $26 billion. But many analysts argue that there is nothing underlying the skyrocketing valuations - or, sometimes, that the companies' obscure finances make it impossible to know. And if the Chinese stock market is a bubble, the new billionaires will disappear as quickly as they rose, since much of their wealth was generated by the stock markets, as well as by the Chinese real estate boom and the Chinese economy, the fastest-growing in the world. "A lot of people are surprised at how fast this has happened," said Jing Ulrich, an analyst at JPMorgan. "But this is the power of the capital markets. A lot of people's wealth is based on newly listed companies."

Who the shadowy billionaires are will matter, because the super-rich tend to make a name for themselves far beyond their borders. They gobble up global assets. They change cultural landscapes through charity. Many analysts believe the Chinese are so new to this type of money that they themselves do not know what they will do with it, assuming it lasts. As much as the bounty of billionaires is a source of pride, it is also a potential cause for concern in a nominally communist country. Per capita income in China is less than $1,000 a year. "One issue is social stability," said Emmanuel Saez, a professor of economics at the University of California. "In Latin America you had such a concentration that revolutionaries wanted to redistribute it."

Perhaps for that reason, many wealthy Chinese entrepreneurs fight to stay off lists of the rich. The early lists of the wealthy often led to unwanted scrutiny, including investigations into possible tax evasion or corruption. But times have changed. With the economy roaring and entrepreneurs sensing a golden age of stock riches, everyone seems to be mouthing the phrase "shang shi," Chinese for initial public offering.

Among the most celebrated are the young Internet tycoons. Robin Li, the 38-year-old founder of Baidu, which is called "China's Google," is now worth about $2.4 billion, making him richer than Jerry Yang of Yahoo. Ma Huateng, 36, of Tencent, another Internet giant, is worth $1.9 billion. And Jason Jiang, the 34-year-old founder of Focus Media, is worth $1.1 billion. Jiang grew up in Shanghai and studied literature before turning his focus to business in college. He says he started out selling advertising in Shanghai and then, in 1997, formed Focus Media with the idea of placing video monitors broadcasting advertisements in elevators, apartment complexes, supermarkets and even on street corners. With the help of Goldman Sachs and Credit Suisse, Focus Media went public in 2005 on the Nasdaq, and its shares have jumped about 800 percent in two years. But it may be ambition more than money, at least so far, that motivates him. "I want this company to be the greatest media group - the greatest media company in the world," he said in an interview. "I want Focus Media in every part of the world." He said he worked 8 a.m. to 2 a.m. and did not feel tired. He said he had no time for anything else, including spending his enormous wealth. He has upgraded to a nicer home in recent years, he said, but has little time for sports or anything else. He is single and works through lunchtime at his desk, buying a $2.50 takeout meal nearly every day. "I think this is typical," he said of successful entrepreneurs in China.

Analysts call people like Jiang the country's best hope for innovation. "These young 30-something-year-old entrepreneurs have become billionaires, and they've become role models for others," said Chen Zhiwu, a professor of finance at Yale University. "They have totally energized Chinese entrepreneurs." Rupert Hoogewerf, publisher of the Hurun Report, said 6 of the 10 richest self-made women in the world were also from China, including Zhang Yin, the founder of Nine Dragons Paper, which collects recycled paper from the United States and turns it into boxes in China. The richest person in China, since last April, is also a woman: Yang Huiyan of Country Garden, the real estate company. Yang, 26, who did not grant an interview, is No. 1 on both rich lists and easily the richest woman in Asia. A graduate of Ohio State University, she is worth about $16 billion, making her richer than George Soros, Rupert Murdoch and Steve Jobs. Her father, a real estate developer in southern China, gave her most of the family's fortune in stock, just before Country Garden's blockbuster initial public offering in Hong Kong. Keeping with their reputation for discretion, of about 15 billionaires contacted recently, only one, Jiang, agreed to be interviewed. They tend to hide their billions, friends say, sometimes with offshore purchases. Some even boast that they still get a $2 haircut.

Their stories, though, are remarkable. Huang Guangyu, 38, grew up in a poor village in southern China, where he and his brother started out selling plastic bottles and newspapers. Now, he controls Gome, one of the most popular electronics stores in the country. The rise of the Chinese billionaire is remarkable not just because of the speed with which it has happened - the country opened up to capitalism only 25 years ago - but because it happened without the help of a single global brand: no Sony or Toyota. (But Japan has only 24 billionaires.) Indeed, China's wealthiest, largely real estate tycoons or manufacturers, appear singularly focused on making it inside China, not outside.

That is the billionaires' next challenge, and some are already embracing it. Shi Zhengrong studied physics and solar energy in Australia before returning to China in 2001 to start up Suntech Power. Six years later, Shi's solar energy company is valued at $9 billion, its stock price up over 300 percent since its public stock offering in December 2005. In an interview this year at his Shanghai headquarters, Shi discussed the role of solar power in China's development. As he finished the meeting, he smiled and said, "Some day, this company will be as big as Microsoft."