Where the money is and who is sitting on it

Reports have made a science of reporting on the lives of the country's fast-growing ranks of magnates

This year is a milestone for Chinese entrepreneurs going international, according to Rupert Hoogewerf, who has spent years tracking and ranking the wealthiest people in China.

Hoogewerf, whose Chinese name is Hu Run, is chairman and chief researcher of Hurun Report Inc. He says he feels strongly that 2015 is the beginning of a major push for Chinese entrepreneurs to go global, even though the trend has been building for some time.

Rupert Hoogewerf believes if entrepreneurship is encouraged, it is very helpful for society and the country's development. Provided to China Daily

"First, you've got an economic slowdown domestically, so in order to stay competitive, it is sometimes important to do an international strategic acquisition or investment," he says. "Next is the strength of the currency. You have very good opportunities and a strong currency to do internationalization."

Moreover, China's domestic market has become very competitive, so strategic investment mergers will have competitive advantages, he says. Although the stock market has been volatile, many companies' market value is double that of last year.

Responding to the trend, he also began a global CEO program and released the Hurun Global Chinese Rich List, which included overseas Chinese for the first time, earlier this year.

"We found there is huge demand from Chinese entrepreneurs going international," he says. He has recently returned from trips accompanying entrepreneurs to such places as San Francisco, India and London.

Born in Luxembourg, Hoogewerf made his name in China by ranking the nation's richest individuals in his Hu-run Report. In the 1990s, he saw that Chinese entrepreneurs, beneficiaries of China's rapid economic development, were quite unknown to the outside world.

In 1999, Hoogewerf, an accountant in Shanghai, spent months reading more than 100 magazines and company financial reports to develop the nation's first ranking of the rich. It was published by Forbes and attracted great attention worldwide. In 2002, he started his own companies, focusing on tracking the lives of the rich. He has met with thousands of entrepreneurs in the past 15 years.

Hurun Report Inc has become an organization of 150 people, and the company's revenue comes mainly from advertising and digital media, print media, conferences, training, business education and market research. It does about 20 reports and puts on 50 to 60 high-end events yearly.

"It is a misconception that all people are shy. A lot more people are more transparent than you might think. So on our list, we estimate about 20 percent were actively engaged with us. One in five will actually help us to work out their numbers," he says.

When dealing with Chinese entrepreneurs, two things are needed: trust and insights, he says.

"One thing that is unique about us is that we started early. We have been doing this for many years, and we focus very much on doing this," he says. "There's no money transaction between entrepreneurs and us."

The Hurun Report shows how people make their money and spend it; the company's Wings & Water reports look at how people live luxurious lifestyles and target people who have or desire to have 200 million yuan or more; the Hurun Schools Guide provides information for the overseas education of the children of the rich; and Horse & Polo China targets elite readers that are passionate about equestrianism.

Apart from ranking wealth, Hurun Reports also rank them in other areas, such as philanthropy.

"I think part of my whole mission is to improve the transparency of wealth in society," he says.

He says the first generation had no venture capital, and during the struggle to make their fortune, they learned a lot.

"But the second generation might get 100 million yuan just to go make mistakes, to learn," he says. "Successful entrepreneurs are very good at bringing together resources, and the second generation has a huge number of resources from their parents. Those resources are incredibly valuable, and they are possibly the greatest wealth that they can pass on to their children."

Another difference is the percentage of entrepreneurs going to business school to enroll in such programs as an executive Master of Business Administration or CEO programs. The percentage is incredibly high compared with the same type of entrepreneur in the United Kingdom, he says. An example is the Cheung Kong Graduate School of Business, which has a very deep influence on wealth creation in China. It has changed many people's thinking and has built many friendships and a strong base of top entrepreneurs.

"A strong platform is very good for wealth creation, which is what I see that's different from other places," he says. "I think an EMBA school primarily is about building networks, but also learning from each other."

"If you look at the success of entrepreneurs from Zhejiang province, it comes from entrepreneurs coming together, having dinner, talking to each other, bouncing ideas off each other, and this is where somebody like Jack Ma (founder of China's e-commerce giant Alibaba) is very legendary," he says.

Ma "seems always to be with other entrepreneurs, coming up with ideas and talking about them. It is not just a social network. It is almost like a self-help group for entrepreneurs who have to deal with their own problems," he says.

Hoogewerf also reports on the richest people by region. People from Guangdong and Fujian provinces, for example, have more influence internationally because there are many overseas Chinese with roots in those two places. But there are few well-known people with Zhejiang province roots outside of China, even though there are many rich people from there within China.

Hoogewerf says that at the beginning, people were very curious about his reports because they never expected that someone from outside China would be interested in their stories.

"When I started, it was simple to tell the story of modern China to the outside world, and also to provide case studies of success and failure to a domestic Chinese audience to encourage entrepreneurship. Telling stories of China to the outside world and promoting entrepreneurship within China - these are two things we stick to," he says.

But now they also promote entrepreneurship not just within China but also among Chinese globally. He is also expanding his business models to other countries and regions.

For the past four years, he has developed a team of 20 people that is doing rankings of the richest individuals in India, and his reports are growing fast there.

"My philosophy of business is like this: if you can encourage entrepreneurship, it is very helpful for society. If your country allows entrepreneurs to grow, and lets these young people have dreams that they can make real - and personally make some money, but responsible money, responsible entrepreneurship - I think that is very, very healthy for the country's development," he says.

"I believe that in about 20, 30 years' time, the percentage of entrepreneurship in China will be greater and greater, especially with the shadow economy and IT technology."

chenyingqun@chinadaily.com.cn

(China Daily European Weekly 11/27/2015 page32)