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Tom Holland

Paramount leader Deng Xiaoping is supposed to have said that 'to get rich is glorious'.
But in China today, glory comes as an extremely unwelcome adjunct to great wealth.
Entrepreneurs who appear towards the top of the Hurun Report's China rich list have an unfortunate tendency to come a cropper soon afterwards.
Just think of Wong Kwong-yu, founder of domestic appliance retailer Gome, ranked as the richest person in China in 2007 and currently languishing in a prison cell. Alternatively, there was Gu Chujun, boss of Kelon Electrical, or cut flower king Yang Bin, once listed as China's second-richest man. Both are now in jail.
So precipitous have been the falls of many of China's wealthiest tycoons that Ruchir Sharma, head of emerging markets at Morgan Stanley Investment Management, believes that Beijing is enforcing an unwritten policy of deliberately shooting down the country's highest-flying businesspeople.
He may have a point. In a recent study, researchers at the Shanghai University of Finance and Economics examined the effect of a rich list ranking on the careers of entrepreneurs, and on the subsequent performance of their companies.
They found that the boss of a big company was more than twice as likely to be arrested by the authorities if he or she had appeared in the list.
And even if the wealthy escape investigation, their businesses suffer. Following a rich list ranking, entrepreneurs find the subsidies their companies get from the government typically slashed by 45 per cent. As a result, investors look warily at the stocks of companies controlled by the tycoons named by Hurun.
On average, in the week following the list's publication, the shares of their companies underperform the market by 3 per cent.
In the long term, the impact is even more pronounced. In the three years after being named in the list, the market valuation of tycoons' companies relative to their book value typically falls by 30 per cent.
All this means that China's richest entrepreneurs have a powerful incentive to disguise their true wealth by understating the earnings of their companies and adopting a relatively modest lifestyle.
To get rich may be great, but in China these days, it pays to forego the glory.
Eagle-eyed reader Ronnie Chan Chichung at Hang Lung Properties has written in to point out an egregious error in the South China Morning Post's Handover - 15 years on supplement published on June 29.
On page 30, a data bubble asserted that according to the International Monetary Fund, China's gross domestic product last year was US$8,382. That would be about enough to buy a second-hand Toyota Camry, provided, that is, the world's most populous nation didn't mind a little wear and tear.
The same bubble added that the GDP of the United States was US$48,387, or about the price of a new Lexus RX.
Perhaps, suggested Ronnie, the figures were meant to be on a per-capita basis, or maybe the word 'billion' had been omitted.
The IMF has often been slammed for its mistakes, but the fund's economists do know the difference between total and per-capita GDP, and their estimates are seldom wrong by nine orders of magnitude. The fault here was clearly ours.
Working out what the numbers should have been was tricky. I scoured through the IMF's database, but couldn't come up with a match for either figure.
The closest I managed are the 2011 figures for GDP per capita at purchasing power parity. This calculation gives a figure for China's per-capita GDP last year of US$8,289, while the US weighs in at US$48,666 (see the charts).
I can only thank Ronnie for pointing out the error, and apologise to all our readers for such disgraceful sloppiness.



To get rich isn't glorious, it's downright dangerous