We recently compiled a report on the 30 Wealthiest People in China and in this article we will look at the richest person.
An Analysis of the Chinese Economy
On May 29, Reuters reported that China is seeing signs of economic recovery after a long period of sluggish economic growth. Consumer spending in China has started to grow, and the government is actively addressing issues within the real estate industry. China’s economy is expected to expand by 5% by the end of this year, from a previous forecast of 4.6%. The IMF reportedly raised its GDP targets for 2024 and 2025 by 0.4 percentage points. On the flip side, the IMF predicts the Chinese economy to drop to 3.3% by 2029 due to its aging population and slow productivity rates. The IMF revised its GDP targets after China reported stronger-than-expected results in the first quarter of 2024. China is now expected to expand by 5% in 2024 and 4.5% in 2025. While the economy is on track to meet its economic targets, deflationary pressures continue to act as a deterrent to the economic prosperity of China, decreasing consumer confidence. You can also read our piece on the wealthiest people in South Korea.
Are Chinese Investments in Cloud Working Out?
On October 9, 2023, CNBC reported that the Chinese government intends to increase the country’s computing power by 50% by 2025, to 300 exaflops. Exaflop is a performance metric for a supercomputer measuring at least one quintillion floating point operations per second. The government also plans to add six new government departments. The government has deduced that for every 1 yuan they invest in computing power, it returns 3 to 4 yuan of economic output. The need to expand China’s computing power is immense, especially in AI, as companies continue to launch AI products for mass consumers and businesses.
On June 27, Canalys reported that cloud infrastructure spending in Mainland China reached $9.2 billion, up by 20%, year-over-year, in Q1 2024. Alibaba Cloud, Huawei Cloud, and Tencent Cloud account for 72% of the total market in China, a decrease of 2% from the previous quarter. Alibaba accounted for 37% of the spend, 19% of the spend was made by Huawei Cloud, and 16% by Tencent Cloud. While Alibaba Cloud had a market share of 39% in China, the company reported just 2% year-over-year in revenue growth in Q3 2023. Overall, the cloud segment slowed down by 10% in 2022 and 12% in 2023.
Alibaba and its Expansion in Cloud Computing
Alibaba Group Holding Limited (NYSE:BABA) is an e-commerce and technology company headquartered in Hangzhou, China. The company, commonly referred to as Alibaba, has an immense focus on developing sophisticated and affordable technology. Alibaba Cloud, also known as Aliyun, is the company’s cloud computing infrastructure that provides computing products to businesses. Some of its products include Elastic Compute Services, CloudBox, Alibaba Cloud Linux, Edge Node Services, and Elastic Block Storage, to name a few.
On May 23, the company expanded the availability of its cloud computing products in Mexico for the first time. Alibaba Group also plans to open new data centers in Malaysia, Thailand, and South Korea over the next three years. While Alibaba accounts for only 5% of the global cloud market share, it has captured 39% of the market in China. It recently launched its latest version of large language models after over 90,000 deployments were made by the company. Its latest large language model, Tongyi Qianwen Qwen2.5, is capable of understanding and formulating answers to questions, code, and reasoning in its natural language.
The company has made significant moves in AI to improve the customer experience. Revenue related to development in AI expanded by triple digits year-over-year. The company plans to establish a competitive edge in the cloud by offering unique offerings at low prices. Over 17,000 small to medium enterprises have subscribed to the company’s AI business helper. In the final quarter of 2024, AI-optimized product searches grew by 37%. Moreover, the company has strategically optimized its cross-border synergies to deliver 5 to 10-day delivery completion rates, up by double digits year-over-year. While concerns related to the macro environment in China persist, Alibaba Group Holding Limited (NYSE:BABA) expansion abroad and price cuts may benefit the company.
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Our Methodology
To compile our list of the 30 wealthiest people in China, we utilized the real time billionaires data from Forbes and ranked the wealthiest people in China in ascending order of their net worths, as of June 24.
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The Wealthiest Person in China
1. Zhong Shanshan
Net Worth as of June 24, 2024: $59.8 Billion
Zhong Shanshan is the richest person in China and the 26th richest individual in the world, with a net worth of $59.8 billion. He is the founder and chairman of Nongfu Spring, a bottled water company that went public in September 2020. His company logged $6 billion in revenue in 2023. The 69-year-old also runs Wantai Biological, a company responsible for making diagnostic tests for various infectious diseases including COVID-19. Zhong Shanshan is a self-made billionaire and has accumulated his wealth in the beverages and pharmaceuticals industries.
Curious to learn about other wealthy individuals in China? Check out our report on the 30 Wealthiest People in China.
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