INDIAN WEALTH OUTSHINES CHINA

The New Zealand Herald, March 16, 2005

If you're curious about the trajectory of the global economy, you could
rummage through mountains of data, research reports and countless internet
sites. Or you could just pick up a copy of Forbes.

The magazine's latest listing of billionaires says more about Asia than
any other region. Asia's global clout grew exponentially last year and
investors should expect more of the same this year.

Even though most of Asia's economies are developing ones, the region
boasts 90 of the world's 691 billionaires. It's home to Hong Kong, the
place with the highest ratio of billionaires to population. And the net
worth of Asia's billionaires rose an average of US$183 million ($247.8
million) a day.

Japan is home to the most billionaires in Asia - 24. It's Asia's biggest
economy, with high living standards and the headquarters of some corporate
powerhouses.

The surprise in the list is the explosion of Indian billionaires - 12 -
relative to mainland Chinese ones. Taiwan has seven, Malaysia has six and
Singapore has four. Australia has six (it would have seven if Rupert
Murdoch had not become an American citizen). China, Asia's most vibrant
and focused-upon economy, has all of two.

Another surprise is the meagre number of South Koreans on Forbes list.
Asia's third-largest economy, home to huge, family-owned conglomerates,
used to rank near the top of the billionaire's list among Asians. Last
year, it had just three. The Philippines and Thailand have as many.

It reflects how far Korea's tycoons have fallen since the 1997-1998 Asian
crisis. Since then, the Government pushed corporate giants to sell assets,
cut debt and downsize. Or it could be that Forbes could not penetrate some
Korean magnates' efforts to hide their wealth.

The dearth of Chinese billionaires reflects all the "old money" that has
flowed to Hong Kong - which has 15 - from the mainland. And most rich
Chinese would rather not be on the Forbes list, as it attracts the
attention of tax authorities.

Nevertheless, it's a reminder that while China is growing faster, India's
progress is far more impressive.

You would be hard pressed to find a global investor who hasn't heard of
Indian software companies such as Infosys Technologies or Wipro. The same
holds true for drugmakers such as Ranbaxy Laboratories and Dr Reddy's
Laboratories. Such names explain why India is winning increased
institutional investment.

China's boom isn't hollow, although it's heavily dependent on foreign
direct investment. Its economy mostly serves the demands and needs of
foreign-owned firms in foreign markets.

That explains the small number of internationally known Chinese companies
that operate on a global scale.

Asia's No 2 economy is still a top-down one, while India's has a powerful
entrepreneurial spirit that helped Indian-born Lakshmi Mittal, who in 2004
overtook Li Ka-shing as Asia's richest man. Mittal, chief executive of
Mittal Steel, saw the biggest increase in wealth in the Forbes survey to
become No 3 in the world. Hong Kong's Li is now 22nd.

Technology titans used to dominate the Forbes list; now steel magnates
like Mittal are getting their due. At the same time, rapid growth in China
and elsewhere in Asia is boosting global commodity prices.

China's economy is eclipsing all else in Asia, yet the increase in Indian
billionaires is a reminder that India's markets are far more developed.
Its equity markets are more mature and trusted than China's.

Ditto for India's debt markets. China, after all, doesn't have much of a
bond market to speak of. India's banking system has its problems, yet it's
not sitting on hundreds of billions of dollars of bad loans, like China's.

This is a still a US-centric world. Yet Asia has what the West doesn't:
rapid growth, young and swelling populations, emerging middle-class
consumer sectors, growing cities, evolving capital markets and undervalued
equities.

Asia's influence can only grow as investors increase their interests here.
If you want to be reassured, just read the latest Forbes.

Billionaire breakdown

* Asia has 90 of the world's 691 billionaires.

* Hong Kong has the highest ratio of billionaires to population.

* The net worth of Asia's billionaires is rising an average of US$183
million a day.

* Japan still has the most billionaires in Asia - 24.

* Fast developers India and China have contrasting numbers - India coming
in with 12 and China a mere two.