Beijing Fashion Week

Forbes magazine recently published its annual list of the world’s richest people. This coincided with another event, the meeting of China’s National People’s Congress (NPC) which is formally one of the supreme organs of the Chinese state, representing the legislative branch. Surprisingly, there is a connection between the two events. The list of the delegates to the NPC includes many of the country’s richest people. Some of them also appear on the Forbes list.

With 2,987 representatives, the NCP is the world’s most numerous parliament, and its meetings, held in the Great Hall of the People, next to Tiananmen Square in Beijing, are always news. Not necessarily for the decisions made there as the Congress’ powers are in fact largely symbolic. Its meeting coincides with that of another well-known but powerless body: the Chinese People’s Political Consultative Conference. The importance of these annual get-togethers is that the country’s real leaders use their speeches before these bodies to announce their priorities and preoccupations to the people and to the world. In this last one, for example, Prime Minister Wen Jiabao said that China urgently needs to undertake political reforms, admitting that inequality and corruption are critical problems, and that economic growth will henceforth be slower.

The NPC meeting also made the news due to the elegance of some delegates. NPR journalist Louisa Lim reported, for example, that delegate Li Xialin was wearing an Emilio Pucci dress worth some $2,000. She also pointed to the Alma-model Louis Vuitton handbag carried by delegate Cheng Ming Ming. It seems worthy of mention that Ms Li is the daughter of the former premier Li Peng and that Ms Cheng, who complemented her handbag with a showy fur coat, is the owner of one of China’s largest cosmetics firms. Also present were representatives of certain ethnic minorities who combined their traditional garb with $800 Burberry bags. The increasingly irreverent community of Chinese bloggers now refers to these Congress meetings as “Beijing Fashion Week”.

The probability that the expensive, brand-name accoutrements worn by the richest delegates are fake is rather low. They can afford to buy the real thing. In fact, their opulent elegance also serves to signal their immense wealth. The personal net worth of the NPC’s 70 richest delegates amounted in 2011, according to Bloomberg, to $90 billion, $11.5 billion more than in 2010.

Per capita income is still lower than that in countries as poor as South Africa and Peru

The delegates to the People's Political Consultative Conference are even richer: the personal wealth of each of them exceeds $1.5 billion (some 14 percent more than last year). To place this in context, you only need to know that the average per capita income in China is $4,200 a year. Though per capita income is now twice what it was in 2000, it is still lower than that in countries as poor as South Africa and Peru.

The presence of the Chinese super-rich in these state bodies began with a deliciously ironic decision: a decade ago the Communist Party secretary, Jiang Zemin, opened Party membership to “the capitalists” of his country. While many money-bags joined the Party, it is also true that many lifelong members have grown rich. “This is a situation like the chicken and the egg: Are they politically powerful because they are rich, or are they rich due to their political influence?” asks Rupert Hoogewerf, who publishes Hurun, an annual list of the thousand richest Chinese. Forbes magazine and its list may assist Hoogewerf in his search for an answer: in examining the origins of the greatest fortunes in the world, it is obvious that many of them grew up under the umbrella (or more) of governments. The state, and not the market, is in many countries the stairway to unimaginable wealth. And, at least in this respect, China is not different.

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