SHANGHAI, CHINA--(Marketwire - October 22, 2010) - ARC China has released the latest edition of its newsletter ARC China Weekly. The publication includes a commentary from ARC China Founder Adam Roseman as well as articles covering topics of general interest with a focus on consumer and retail, alternative energy, recent investment transactions in China's current news, and transactions in the Middle East, Europe, and the United States.
Roseman's foreword focuses on the role of China's domestic consumption in the rising number of China's US dollar billionaires, which increased by 69 to 189 this year. The Hurun Rich List, the annual ranking of the richest people in China, names 1,363 individuals with a personal wealth of RMB 1 billion ($150 million), up from 1,000 last year and just 24 a decade ago. The list follows recent research backed by Credit Suisse estimating that China's wealthiest 10% of households are now 26 times as rich as the bottom 10%.
While only 5% of the 1,363 billionaires made their fortunes from export-focused businesses, the richest Chinese are making money from sectors reliant on the Chinese consumer. Entrepreneurs are often able to benefit from the lack of a state-owned monopoly dominating their particular industry. It is also no coincidence that some of the sectors represented on the Hurun list, such as food & beverages, information technology, and pharmaceuticals, are proving attractive to stock analysts right now as well.
The fortunes of China's wealthiest individuals continued to grow rapidly despite the index of Shanghai Stock Exchange falling 10 percent last year. The average wealth of the first 1,000 people on the list was up 26% from last year, and the average wealth of the first 10 was up 32%. The financial services and mining sectors attracted the most investors, while health care, IT, retail and apparel all enjoyed record years.
In return, the concentration of wealth among the richest Chinese also helps to boost domestic consumption, especially luxury goods consumption. As Japanese sales wane and the United States economy stagnates, premium brands cannot seem to open stores in China fast enough. Increasing domestic consumption and wealth creation in China's 2nd and 3rd tier cities will continue to result in tremendous growth in the number of luxury brands entering those markets and a dramatic shift in the numbers of high net worth individuals beyond Beijing, Shanghai, and 1st tier regions.
The newsletter can be found online at http://www.arcchina.cn/this-week-in-china/volume-82/.
About ARC China
ARC China is an investment firm focused on making investments in entrepreneur-owned small and medium sized enterprises located in the Tier II and Tier III regions of China. ARC China's investment strategy is to make value-oriented, highly involved and exit-driven equity investments in a diversified portfolio of domestic consumption-focused high-growth Chinese businesses in these regions, and then to create value in these businesses by applying the team's professional experience and relationships to help the companies upgrade their management teams, technology, systems, business processes and financial and other information reporting. ARC China's team of experienced investment professionals and in-house due diligence staff have deployed this proven and unique on-the-ground investment strategy in China since 2008. More information can be found on ARC China's website at www.arcchina.cn.
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Contact:
Adam Roseman
ARC China
182 Chang Shu Road
Xu Hui District
Shanghai 200031, P.R. China
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