More trouble coming

China's economy generates billionaires by the dozen - International Herald Tribune

China has a lot of new billionaires, but there is reason to expect they won't stay that way forever:

Analysts are skeptical about the way China's stocks are valued, particularly those with huge amounts of untradable government shares, like PetroChina. But to the buyers in Shanghai, at least, it dethroned Exxon Mobil as the most valuable company in the world. And by the same criteria, they would consider China Mobile the world's most valuable telecommunications company. ICBC, a state-owned bank that was nearly insolvent a decade ago, is worth more than Citigroup to the speculators.....

But many analysts argue that there is nothing underlying the skyrocketing valuations - or, sometimes, that the companies' obscure finances make it impossible to know. And if the Chinese stock market is a bubble, the new billionaires will disappear as quickly as they rose, since much of their wealth was generated by the stock markets, as well as by the Chinese real estate boom and the Chinese economy, the fastest-growing in the world.

And if you thought the US had inequality in income:

As much as the bounty of billionaires is a source of pride, it is also a potential cause for concern in a nominally communist country. Per capita income in China is less than $1,000 a year.

"One issue is social stability," said Emmanuel Saez, a professor of economics at the University of California. "In Latin America you had such a concentration that revolutionaries wanted to redistribute it."