14/06/2014 Talking Business with Linda Yueh

Who are the next billionaires? Right now, most are found in America but

within a decade, Asia will be the place where there will be more

super`rich than anywhere else in the world. In this island of Singapore

weather megarich live, I'm Linda Yueh and we are Talking Business. ``

where the megarich live. A warm welcome to the programme. As

the world economy is increasingly powered by emerging markets, there

is greater prosperity found all around the world. So, who are the

new billionaires? Young, rich and talented. As the world changes and

the money moves from West to East, so will the people who make a

billion. Today, there are just under 1700 billionaires in the world.

Within ten years, there will be more than 2300. In the United States, the

number of billionaires will grow by up when to 1% but China's lyonnaise

will grow at four times that break. `` 21% but China's lyonnaise will

grow. `` billionaires. If you want to marry one of these

men, you better be quick. 95% are already married and 87% of the women

are already married. Two thirds of the ultra`wealthy make the money

themselves rather than inheriting it. So, with the vast majority of

rich people making the money themselves, new technology could

mean it is easier than ever to make your own billion. Asia has seen its

share of the self`made rich rise rapidly. This man said he plans to

give his way `` wealth away to charity. 20 years ago, he returned

from California to China. He is now the chief executive of food and

supply chain, bomber. I caught up with him to find out how he set up

his business empire. `` supply chain conglomerate. They had such a great

vision of China and they saw the potential of growth in China. They

said since you were born and raised there, why don't you go back first?

Of course, it is very attractive. They were going to back me up with

whatever money I needed to come and invest in China. It took me quite a

while to figure out whether I should go or not. Finally, I decided yes.

It took me a month to decide it. The fact is that they were correct. Is

it easier these days for others to come into China, set up a business

and even become a billionaire? Is that even possible for non`Chinese?

I think it is easier than 20 years ago because a lot of the

infrastructure is already in place. The culture has changed a lot, it is

more in favour of business. So, the environment has changed dramatically

in the last 20 years. I think this is a better time than 20 years ago.

20 years ago, coming back to China to do business was actually tougher.

If you were well developed in the United States or Europe, coming back

to China back then was not easy. You had to deal with a lot of situations

that were tough, rough situations. Today, it is more polished. But the

weight of doing business and the strategy is totally different

because the environment of the market has changed. So, you need to

have a different strategy. Is that the biggest piece of advice you

would give for someone looking to go to China and set up the business but

themselves? Coming back to China, you have to be really aware of what

you are going to facing China. It is going to take many steps before it

will get to there and entrepreneurship is very important.

You have to work very hard, beep every diligent and you have to have

a good strategy and have a very good network, working with Chinese people

and know the culture. There are a lot of things in there to make the

success happen. It is not just coming in and expecting a good

return in the first year. What was the biggest challenge you faced?

Human resources. In the last 20 years, it has always been very

difficult. To build a strong team, a good bunny with good talent. That is

my challenge. `` a good team with good talent. At the same time, there

is global exposure. These kind of people are difficult to find. I

always build this is the biggest challenge. Is there something about

operating a system still run by the Communist Party? What are the

particular challenges that poses to an entrepreneur? In the last ten

years, it is a very big challenge. China was taking gone a bigger role

for the state owned enterprises. On the other side, government playing

not such a big role. Now, with the third session of the 19th coming

years party committee commission happening at the end of last year,

China has set up a different policy now. It is for the Chinese private

sector to revive again, or any private companies can have better

opportunities because the Chinese government is bringing government

role away from the business. They are giving great opportunities for

private companies now, today. So, you see in the next ten years, the

private sector is will be in a better position in China with great

opportunities,. You mentioned the importance of the social network.

How important our connections for business in China? Is it different

than other countries? You have worked in the US. Yes, the

collections in China are not just connections with your peer companies

or the companies in your own industry. You have to be connected

with the government, you have to be connected with a lot of other

industries as well. In order to see opportunities, especially today,

this world is all about mobile internet, there is a lot of

connectivity is in place. It is quite different from the United

States. The US, when you say my connection, it is very much in the

industry say `` in the specific industry. But you are in the closed

market and you may not be able to see the bright opportunities outside

of the system so that you need to think out of the box in China, in

many ways. This connection is again to do very much with the government

as well as companies within the system or outside of the system.

Finally, you are self`made. Do you envy those who inherit their

business, their wealth? There are a lot of family run businesses in

Asia. No, I don't think so. I don't envy those families. I actually feel

very worried that the wealth that might wife and I are able to build

in the last 20 years, how is this going to affect our children? We

just don't want out with Jordan to take our money and squander the

money. `` we don't want our children to take our money. Historically,

people do that in China. The talented kids and real entrepreneurs

should start from nothing, always start from nothing. I hope that our

Witchell drunk and start from nothing.

What has caused the rapid growth in the super rich? Where are the new

billionaires expected to come from? There will be more in Asia than

America and Europe within a decade. The ultra rich Asia are expected to

outnumber any other region. The growth breaks reflect the rise of

wealth in the emerging well. `` the growth rates.

The growth of the super`rich in Asia, the decayed Tyler ``

particularly China and India is another indication of the shift of

economic weight from West to East. Is the rapid growth of Asian

economies creating a whole new set of billionaires? With me to discuss

what is causing the rapid rise in wealth in Asia and the implications

for inequality are attacks paved `` a spokesman from Deloitte, and a

spokesman from Wealth`X. What is causing the rapid growth of

billionaires? We have a lot of start`ups with very dynamic

entrepreneurs who are making a lot of money because there are no

constraints, there was no bureaucracy in the same way as in

Europe. There is a huge market for them to sell to. This is generating

profit. Rachael, you are an entrepreneur, is that one of the big

changes in Asia? That with growth of the economy is, people can go in and

create their own businesses? the economy is, people can go in and

create their In the past there has been massive growth in China and

China has been the workshop of the world for some time now and anyone

who has actually capitalised on that has done well for themselves. Is

huge part of it is the growth in China. This sizeable trend, is it

something we haven't seen before? A number of things. We are a

research company. In our research, we found that this is going to be

the first generation that has grown up without a world war. This

generation's behaviour and relationship towards money is very

different from their parents' generation. In their parents'

generation, I see it with my parents, you squirrel away money for

a contingency. The younger generation today is fearless.

Especially where they see opportunity and they are optimistic

about the future. The future being growth rates. Let me try this out,

if I fail, I can always get a job. It is that fearlessness of taking

risk that will make the new entrepreneurs. In terms of profiles

of billionaires, how is that playing into the profile of who we should

expect to see in the coming years? Of course you will have people who

inherit money, but you will also have those that inherit the money

and take it to another level. Inherited and self`made, as it were.

What we are finding in China, for example, the average age of the

billionaire is about 10 to 12 years younger than their counterparts in

Europe. In the grand scheme of things, that is huge. 12 years is a

long time in someone's business life. We are finding them younger

and younger in Asia. That is because there is a new generation of

entrepreneur that is younger. You are one of the new generation of

entrepreneurs. In the kind of cohort that you're working with, is what

they are observing in terms of the trends and what you're observing as

you're doing business, are there some people who have inherited

wealth, taking it and starting a new business, what is the characteristic

you are finding? I find that the entrepreneurs today think

differently to those in the past. In the past, entrepreneurs tended to

follow the rules of the game before they tested the waters. Whereas

entrepreneurs today, they are more risk`taking. They courageously take

the plunge, even without any prior business experience. I find that

entrepreneurs are more daring. In terms of the way that they do

business, they are less rigid. What are the other trends in billionaires

that we should be expecting? The older generation of billionaires

tend to focus more on philanthropy. Contrary to popular belief, very

wealthy people also die! If you talk to someone who has led a good life,

they want to leave a legacy. They want to leave a way of being

remembered. That is by way of philanthropy. You have a movement

right now of giving back, of the giving pledge that was initiated, I

believe, by Bill Gates. They are billionaires. These are people, when

they have their foundations, these are funds that will rival

governments' budgets. Will we see that in Asia? We will see it. When

we get up there in age, when the next generation says, my father has

worked very hard, I have not had to work as hard for this money. You

will find that, in due course. I am not saying it is going to be next

week or next year. What you said, that is going to be worrying. My

father has worked hard, I do not have to work as hard? Is that going

to be an issue? In Asia, it is not an issue at all, because one of the

primary concerns of the patriarchs, the generation that we are seeing

disappearing is that their children are actually being adequately

trained overseas. That is why their tax exposure also usually has a US

element, which is very interesting for the tax advisor. That apart, it

also shows that there are three or four children that are actually very

well`educated and some of them have the entrepreneurial spirit, but they

have a much higher base than their father had actually started from.

Because of the education? The education, the capital and the

backing. If there is a family discussion about growth in the

family, who is going to do what, there might be one guy who is

actually coming from a Singapore family who is in charge of expanding

into China, another one might be looking after the finances and

building a stronger supply chain on the procurement side. It is the

multiplier of educated people within the family that will guarantee that

this principle of three generations and everything is gone will not

continue. What do you think, Rachel? When you see the children who have

inherited money in family businesses, is that what you're

finding? That they are well equipped to do this? Maybe they want to party

a little bit? There are those that want to party and squander their

parents' money. You have those where the parents taught them the value of

money. You have two sides. When you're born rich, it is easy when

you have the backing of your family. You do not need to work so hard.

They are not motivated to earn money. They have not experienced the

pressure to want to make money. I think it is easy for them to think

about having fun instead of just working for the family. The other

issue this raises is if you have more rich people, it does create a

sense of inequality? Everyone is worried about that around the world.

Is one of the solutions something like a wealth tax to try and

redistribute some of this wealth? What do you think? I think taxes

tend to have some sort of ignition triggering it. People who you want

to tax are disappearing and you cannot track where they are. You

have lots of entrepreneurs coming to places like Hong Kong, Australia,

Singapore. Countries where there is no wealth tax. You know that many

countries have had wealth taxes. Some of them still do, like the US.

There will never be a global wealth tax. There might be a global

transparency of what the people have, but there will always be some

sort of jurisdiction that has to formulate the rules. Do you agree?

Yes, you know, you're always going to have inequality in wealth. The

issue is when the inequality between the superrich and the not superrich

is when it is so vast that it borders on revolt or revolution.

When you look at things like absolute poverty, the world has made

great progress on that, however, relative poverty is extremely

visible in this day and age. People know how the rich spend their money

and what they spend it on. Everyone feels poor compared to their

neighbour who has got yet another car or a bigger house. Relative

inequality will always exist. And it becomes more visible today, with

things like jets and yachts, and boats, and television shows that you

can see anywhere in the world. The Internet, I can watch any programme.

I can see what I have or do not have against my counterpart in another

country. That also creates strife. Strife between the haves and

have`nots. The important point is what you have mentioned before,

philanthropy. In the US, there is now a culture, there has recently

developed a culture of giving back and donating. Founding certain

projects, like the Bill Gates' Foundation. People try to donate

money, publicly, to interesting projects. If that goes into fashion

in Asia, I think that will take out a bit of the movement in the

inequality discussion. I'm going to finish with this. You have all dealt

with people who are superrich. What is the most extravagant thing that

you have seen? It has got to be things like a Jacuzzi in a private

jet, that sort of stuff. In a private jet? Yes, not a Jacuzzi or a

private jet, a Jacuzzi within the private jet. If I ever get that

rich, I will tell you why that is interesting. Why do you need a

Jacuzzi in a private jet?! What about you? For myself, I know

someone who bought a private island, and he converted part of it into a

theme park. His own personal complex, an area where you can park

your private jet and all that. It is pretty extravagant. Thank you very

much indeed. Asia is forecast to have the most billionaires within a

decade, more than in any other region as economies develop. It is

not just in Asia, but also other emerging countries. As more

billionaires are self`made, we will have to rethink the implications for

wealth and equality. Over the coming months, our teams around the world

will be finding out who might be in the next generation of the megarich.

Join us across the BBC, online, on TV and on radio. Meet the

billionaires and join us next time for more Talking Business, with me

Linda Yueh. Good evening. We got close to 25

degrees today across parts of Dorset. There were some showers

around despoiling procedures. This zone of cloud extends down from

Scotland into Wales. There are some showers at the moment. The showers

are drifting slowly south. Some will continue through the