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April 11, 2022

Another Chinese city has overtaken New York for number of billionaires

Three years ago, American entrepreneur Raj Oswal traveled to the Chinese city of Shenzhen on behalf of a client. He was so impressed that he stayed and started his own tech company.

“You can’t find too many other cities in China or around Asia that really embrace innovation as Shenzhen does,” Oswal said, comparing his move there from California to his father’s decision in the 1970s to leave India so he could pursue his studies and a career in the United States. 

Oswal described Shenzhen, a city of 17.5 million on China’s southern border with Hong Kong, as a place filled with “youthful optimism.”

Increasingly, it’s also filled with money. The former fishing village, now a tech hub known as China’s Silicon Valley, has joined Beijing and Shanghai as the world’s top three cities for billionaires, edging out New York for the first time this year. 

According to the Hurun Global Rich List, an annual ranking compiled by a private Shanghai-based company, Beijing is home to the world’s greatest number of billionaires at 144, followed by Shanghai with 121. There are 113 billionaires in Shenzhen, compared with 110 in New York, while London came in fifth with 101.

The growing concentration of wealth isn’t news to people in Shenzhen, which added eight billionaires since last year.

“It’s almost more of a wake-up call for the rest of the world,” said Rupert Hoogewerf, chairman and chief researcher of Hurun Report, the company behind the list.

While rankings can fluctuate, he said the rising number of billionaires in Shenzhen reflected a “megatrend” that will draw more young entrepreneurs to the city in coming years. 

“It is a significant indicator of where Shenzhen has come from and where it is going,” he said.

Shenzhen’s rise began in 1980, when it was named China’s first special economic zone as part of the country’s “reform and opening up” under then-leader Deng Xiaoping. That allowed the city to experiment with market capitalism in an effort to attract foreign investment. From 1979 to 2021, Shenzhen’s gross domestic product grew from less than $28 million to almost $475 billion.

Today, the city is home to some of China’s biggest tech companies, including telecom giant Huawei and the internet conglomerate Tencent, inspiring others to follow. Last year, 2,500 new state-recognized high-tech companies were set up in Shenzhen, bringing the total number to 17,000, according to the local government. 

It is also part of what China calls the Greater Bay Area, an integrated economic and business hub that aims to link Shenzhen with eight other cities in Guangdong province along with the Chinese territories of Hong Kong and Macau.

The opportunities were apparent to Oswal even as he taxied from the Shenzhen airport after he first arrived in 2019.

“All the stereotypes that I had on Chinese cities were broken down one by one with the changing modern and green urban landscape along the road,” he said.

Heng Chen, an associate professor of economics at the University of Hong Kong, said Shenzhen’s momentum was aided by its welcoming environment for entrepreneurs. 

“The structure of the population is still very young compared to other super cities or first-tier cities in China, so that’s one of the reasons why it’s a very attractive place,” he said.

In addition, government officials in Shenzhen “commit a lot of resources, financial resources to attract top talents from the rest of the world.”

But the city has also faced steep challenges during the coronavirus pandemic, especially in recent weeks as China battles its worst outbreak in two years. The government’s zero-tolerance strategy relies on border closures, mass testing and strict lockdowns, and the restrictions have caused delays at Shenzhen’s factories as well as its port, one of the largest in the world.

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