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| +Wei Gu |
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| Wei Gu |
A little-known new energy entrepreneur and a property tycoon are set to surpass Internet mogul Jack Ma as China’s richest man.
Ma, 51, and the founder and executive chairman of Alibaba Group, saw $1.4 billion of his fortune wiped out Thursday following revelations earlier this week by a Chinese regulator that the company had lax oversight on counterfeit goods sold on its market places, as well as other alleged illegal activities on its sales platforms.
On Thursday in New York, Alibaba shares fell as much as 11% before closing down 8.8% following its lackluster earnings report, as its revenue growth of 40% missed analysts’ expectations, despite its sites hosting a record-breaking online sales day in November. Ma owns 8.8% of Alibaba, according to the company’s IPO filing.
Alibaba’s shares are still trading 31% above their initial public offering price in September, when its blockbuster $25 billion listing vaulted Mr. Ma to become China’s richest man. His wealth is now estimated to be $23.1 billion, down from $24.2 billion in mid-December, according to Chinese wealth tracker Hurun Report and a Wall Street Journal tally.
More Alibaba shares could flood the market when a lock-up period for shareholders expires. Some shareholders can sell up to 40% of their holdings 180 days after Alibaba’s listing in mid September. That would mean around mid-March.
Chinese property mogul Wang Jianlin, chairman of Dalian Wanda Group, 61, has now surpassed Mr. Ma in terms of wealth. After successful listings of its commercial properties arm in Hong Kong in December and a cinemas unit in Shenzhen in January, his wealth has jumped to $28.1 billion, up from $23.4 billion in mid-December, according to Hurun and The Wall Street Journal’s calculation.More in the Wall Street Journal.
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| +Wei Gu |
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| +Wei Gu |
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| +Wei Gu |
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| +Shaun Rein |
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| +Wei Gu |
Immigration demand has been subdued in recent years after a rush to leave the city in the 80s, prior to 1997, when the U.K. gave Hong Kong back to China. But it has crept up in recent years due to skyrocketing home prices, high costs of living and pollution.
Eugene Chow, an immigration lawyer at Chow Kong & Associates, said some of the unhappy middle class people are looking for a way out. “A client told me he didn’t want to raise his children in this increasingly polarized society,” said Mr. Chow.
According to calculations by Hong Kong Bauhinia Foundation Research Centre, the cost of raising a child from birth to college graduation in Hong Kong averages about 5.5 million Hong Kong dollars (US$710,000) for a middle-class family. (A recent calculation by the U.S. Department of Agriculture showed that the average cost for a middle-class family to raise a child up to college age was $245,340.
Hong Kong’s average home price is equal to 14.9 times gross annual median household income, making it the least affordable city globally in a Demographia survey.
“Lot of frustration has been built in Hong Kong, Occupy Central sparked interest even more,” said Denny Ko, an immigration lawyer at PrimAsia Metropolis Immigration Consulting Ltd, adding that Taiwan has been an attractive destination for middle class Hong Kong people who want an easy place to live nearby.More at the Wall Street Journal.
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| +Wei Gu |
Most Chinese already have taxes deducted from payrolls, so they are less likely to be hit by renewed collection efforts. But nonsalary income, investment income or proceeds from stock options, which have become an important source of wealth for Chinese, haven't been closely tracked.
PricewaterhouseCoopers says many local tax bureaus have started to look more closely at income that comes from stock options and grants this year. Greater attention is also likely to be paid to the overseas assets of wealthy Chinese. China, like the U.S., is one of the few countries in the world that demands tax on citizens' global incomes, but not many Chinese even know about this policy.
At the G-20 conference in Australia in November, Chinese President Xi Jinping said he wants to improve global tax collection and crack down on tax evasion. It was the first time a top Chinese official had commented on tax issues at a global forum, the State Administration of Taxation said.
Beijing has also shown increasing interest in taking on multinational companies. In November, the official Xinhua news agency reported that a U.S. multinational firm had been ordered to pay the government 840 million yuan ($137 million) in back taxes and interest in what it called China's largest tax-evasion case. Xinhua didn't name the company, referring to it as "Company M," but details it provided about the firm match Microsoft Corp., at least in part. The U.S. software maker neither confirmed nor denied it was the company in the report, saying it works closely with local tax authorities to ensure it complies with the law. Employees of such companies may be targeted next, tax experts say. Some multinational firms use tax shelters abroad to help Chinese employees reduce their tax burdens, paying staff through their overseas operations, for example.
For Chinese, fines for tax evasion range from half to five times the amount of underpaid taxes. Chinese marginal personal income-tax rates are 45% for income that exceeds 80,000 yuan ($13,000) a month, and 35% for between 55,000 yuan and 80,000 yuan. In Hong Kong, the effective tax rate for high income earners is 15%.
Foreigners who don't comply with Chinese rules face bigger penalties. In the past, those who were found underpaying their taxes just needed to cough up the difference and pay a small penalty. Starting this year, they may be restricted from leaving China until their back taxes are paid, according to a joint statement by Beijing's tax authority and police bureau.
Frequent fliers also raise red flags. For example, it is common for global banks to base their senior China bankers in Hong Kong, where the effective tax rate for high earners is 15%, and have them travel to China almost every week. The general view is that if the bankers are in China fewer than 183 days a year, they won't have to pay taxes. But tax experts caution that the rule is more complicated and that people risk running afoul of it if they aren't careful.More in the WSJ.
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| +Wei Gu |
“It was a very tough battle,” Mr. Liu said, adding that the final price is “reasonable”. “I was against a non-Chinese bidder and I want to bring the treasure back to China,” he added.
The piece, which remains in excellent condition with vibrant colors, was sold first by Christie’s in London in 1977 by the family of an English aristocrat for 7,500 pounds. It was again auctioned off by Christie’s in Hong Kong in 2002, for HK$30 million. In April, Mr. Liu swiped his American Express Card to pay US$36.3 million for a tiny porcelain cup from the Ming dynasty with a chicken painted on its surface, after a seven-minute bidding war at a Sotheby’s auction in Hong Kong. He confirmed he intends to settle the payment for his latest purchase using American Express again.
Mr. Liu, 51, is a Shanghai businessman who ran a handbag business and drove taxis after finishing junior high school. He was one of the earliest investors in the Shanghai stock market, and then bought large stakes in publicly traded Chinese companies. The successful investor and his wife first started collecting art about 20 years ago when they were looking for paintings for their villa.More at the Wall Street Journal.
Wei Gu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers´request form. |
| Wei Gu |
Countries around the world have been streamlining visa processes for Chinese travelers, who have made 98 million trips so far this year. They are also big spenders, splurging the most on tax-free shopping last year and accounting for 27% of global tax-free travel spending, according to Global Blue, which processes tax refunds.
Chinese travelers have already begun to discover the allure of New Zealand, accounting for the second-most number of tourists there, after Australia. Average spending by Chinese visitors to New Zealand is higher than any other groups of tourists, according to China Unionpay.
New Zealand topped a list of 22 nations as Chinese tourists’ most satisfying destination in the first quarter of 2014, according to China Tourism Academy, a research center under China’s Tourism Bureau. The poll measures travelers’ satisfaction with public services, environmental conditions and security. New Zealand’s fresh air and stunning scenery can provide a bit of a reprieve for those living in heavily polluted Chinese cities.
But the influx of Chinese tourists—and property buyers—has also led to a backlash in New Zealand. Mr. Peters, leader of conservative political party New Zealand First,argues that the credit-card policy essentially allows Chinese to buy their way into the country by skirting key criteria.
However, Kevin Bowler, chief executive for government agency Tourism New Zealand, said any effort to streamline the visa process for international visitors are good for the tourism industry.More in the Wall Street Journal.
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| +Wei Gu |
