Billionaire boom in China as stock market soars

China's business elite were the big winners of last year's soaring stock market, with the top 50 executives worth nearly 40 billion yuan (5.1 billion dollars), state media has reported.

None of the top 50 was worth less than 200 million yuan and half of the top 50 saw their stock portfolios break the 500 million yuan mark, the official Xinhua news agency reported.

Zhang Jindong, the chairman of the Suning Appliance Co., one of the country's largest home appliance chain stores, has become China's richest executive, according to the report.

The 210 million shares he holds in the company quadrupled in value in 2006, pushing his estimated wealth to nearly nine billion yuan, it added.

Lu Guanqiu, the chairman of Wanxiang Group, was catapulted to a second spot on the list due to steep rises in the value of his shares in Chengde Lulu, a beverage maker, and Wanxiang Qianchao Company, an auto parts manufacturer.

The take-off in executive fortunes has been sparked by shareholder reforms which allowed previously non-tradable shares to be converted into ordinary stock, the report said.

After stagnating for the past five years, China's stock markets finally boomed in the latter half of last year.

The benchmark Shanghai Composite Index hit a record of 2,675 points on the last trading day of 2006, bringing gains for a remarkable year to 130 percent.

The State Information Center, the Cabinet's think tank, predicted that the value of China's stock markets could grow by 20 percent in 2007, Xinhua said in a recent report.

News that some Chinese manage to make literally billions without having to work extra comes amid signs that the wealth gap is deepening in China, with the poor becoming even poorer.

An analysis of poverty in the period from 2001 to 2003 showed a slight decline in the income of the most destitute 10 percent of China's population, the World Bank said last month.

Joseph Cheng, a China expert at the City University of Hong Kong, argued few Chinese were likely to complain about the stock gains as long as the money was earned in an honest manner but problems could arise if they suspect foul play.

"Many average citizens doubt the legitimacy of the wealth accumulation by some of the plutocrats and that is where discontent is likely to rise," he said.

"Therefore the operation of the stock market and company management needs to be regulated and supervised so that they can be more transparent and the manipulation of share prices can be prevented."

China's leadership is increasingly worried about the rise of inequality brought about by market reforms which have rewarded people with skills and personal connections, and punished those without.

The income gap is partly blamed for an increase in social unrest, especially in rural areas, and narrowing the divide is a high priority for the current generation of leaders who took power in 2002 and 2003.

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