Communist estate-planning
China is wrestling with a novel phenomenon: inherited wealth
Even as the economy slows and opportunity narrows, a lucky few receive big windfalls
Photograph: Lauren Greenfield/INSTITUTEChen Kai likens his work to promoting the use of condoms.
People are starting to hear cautionary tales about what can go wrong and so are becoming interested in protecting themselves, he says.
But there are cultural obstacles: writing a will, or indeed having much wealth to pass on in the first place, are novel concepts in modern China.
Private enterprise and private wealth—eradicated in the early decades of Communist rule—have been possible again only for the past 40 years or so.
The first generation to get rich after China embarked on market reforms is beginning to die, which is why Mr Chen’s state-backed charity, the China Will Registration Centre, is helping the elderly write and file wills.
Yet even Mr Chen is somewhat conflicted about China’s first big inter-generational transfer.
A small sliver of society will soon be inheriting vast wealth just as a prolonged economic slowdown is shrinking the economic prospects of the young.
That unearned income should be taxed, argues Mr Chen: “It’s absurd for a socialist country not to introduce an inheritance tax.”
It was only in the late 1970s that Deng Xiaoping, then China’s paramount leader, opened the economy and “let some people get rich first” as a step towards “common prosperity”.
Over that time a lot of people have become rich.
In 2025 alone, mainland China minted 70 new billionaires, bringing the total to 470, according to a report by UBS, a bank.
(America has 924.)
These billionaires alone have amassed some $1.8trn.
Almost none of that wealth is inherited.
Fully 98% of billionaires in mainland China are self-made, compared with 66% in Hong Kong and 69% in Taiwan.
But China’s wealth is in increasingly liver-spotted hands.
Those 60 or older accounted for 49% of people worth at least 5bn yuan ($720m) in 2025, up from 23% in 2016, according to data from Hurun, a research firm (see chart 1).
In the decade beginning in 2025, Chinese with a net worth of more than $5m will pass on $2.1trn, according to estimates from Altrata, a wealth-intelligence firm.
That will get messy.
Gao Hao of Tsinghua University studied the deaths of founders or controlling shareholders of listed Chinese firms between 2003 and 2024, finding 67, with an average age at death of 64.
Just six of them had written wills.
Where there’s no will, there’s no way
Perhaps the best-known billionaire with a murky estate was Zong Qinghou, who died in 2024 at 79.
He was born poor, but turned a business making yogurt drinks into a beverage empire called Wahaha.
For a time he was China’s richest person.
His rags-to-riches story embodied the seemingly limitless possibilities of the reform era.
Zong’s daughter, thought to have been an only child, inherited his wealth.
But a year after his death, three other people claiming to be his children disputed her claim to his assets and sought more than $2bn from his estate.
The legal battle, which is still unresolved, has gripped the country.
Suddenly lots of entrepreneurs “wanted to understand the ins and outs of the Wahaha incident”, says Mr Gao.
That was only the tip of an iceberg.
From 2006 to 2015 there were fewer than 90,000 court judgments on matters of inheritance, according to The Economist’s tally.
From 2016 to 2025 that number almost quintupled.
This reflects increasingly complex families, with more divorces, unmarried parents, childless couples, children living abroad and so on.
Chinese law splits assets evenly between parents, spouses and children (including those from mistresses), but some want to pass their wealth to grandchildren or unmarried partners.
To complicate matters more, many wills are not valid.
The problem afflicts more than the ultra-rich.
China’s 500m-strong middle class has also accumulated wealth, including through the privatisation of public housing.
The urban home-ownership rate rose from 20% in 1980 to 96% in 2022.
Despite a housing slump in recent years, about 70% of household wealth is in property.
The authorities increasingly have to grapple with cases like that of one Ms Jiang, a single 46-year-old in Shanghai, who died in December without a will or any close relatives.
Worries about mismanaged inheritance are common enough that courses have sprung up to help prepare the children of the rich for the responsibilities that lie ahead.
Oliver Rui, who directs programmes on family offices and wealth-management at China Europe International Business School in Shanghai, says perhaps 3m family businesses will be passed on by the mid-2030s.
“In just 40 years, we’ve completed a development path that the West has taken a hundred years or longer to traverse.
Our wealth-accumulation speed is far faster,” he tells two dozen young men and women at a seminar about how not to squander their inheritance.
Your family businesses are worth on average nine figures, another speaker crows.
One tactic to secure inherited wealth is intermarriage between rich families.
“It’s like a spider’s web,” says Rupert Hoogewerf of Hurun, a compiler of China’s rich lists, of the proliferating marital ties among the elite.
“They all came from nothing, but the next generations are very much in a class of their own.”
At any rate, wealth is becoming more concentrated.
In 2024 the top 1% in China held 30% of the wealth and the top 10% held 68%, according to estimates from the World Inequality Database overseen by Thomas Piketty, a French economist.
That’s up from 16% and 41%, respectively, three decades before (see chart 2).
Many Chinese once viewed wealth and success as reflections of hard work or intelligence.
The rich were an advertisement for the dream of advancement.
In 2004, according to a paper by Michael Alisky, Scott Rozelle and Martin Whyte, 62% of Chinese felt that “effort is always rewarded” and blamed poverty on lack of ability.
But in recent years economic growth has slowed sharply and ordinary Chinese have become gloomy about their prospects.
The proportion who think hard work pays off fell to 28% in 2023.
People now see unequal opportunity as the biggest factor contributing to poverty; connections and being born rich are considered the keys to wealth.
They think mobility has slowed.
From 2004 to 2014 70% of respondents thought their family situation was better or much better than five years before.
In 2023 only 39% thought so.
Unemployment among those aged 16 to 24 who are not studying is 17%.
Jobs in the civil service and state-owned enterprises have become coveted for their stability and benefits, with hundreds or thousands applying for each position.
Yet there is growing resentment at the perception that these are secured through connections.
This view is epitomised in complaints about luobokeng or radish holes: job descriptions that are theoretically open to anyone but in practice are tailored to a specific, pre-ordained recipient.
This year’s Jiangsu Spring Festival Gala, a big television show, featured a skit on luobokeng that went viral because it voiced people’s “unspoken grievances, resentment, and helplessness”, as a blogger puts it.
At a café in Guiyang, the capital of one of China’s poorest provinces, Long Wanyun describes how she and her friends observe the curated lives of rich kids on Xiaohongshu, China’s answer to Instagram.
They joke that the main distinction these days between successful people and everyone else is not how they did in the national university exam or what job they landed after graduating, but whose amniotic fluid they were formed in.
“Your birth determines your future,” says Ms Long, 26.
“This is something we’ve all felt in recent years.
We have to learn to accept that we will only be ordinary people.”
Not everyone is accepting, of course.
As she sweeps the steps of her storefront in Guiyang, Wang Caoyi, 45, seethes with anger at the state of the economy.
“No one is making any money,” she says, pointing to shuttered shops across the street. She calls her family “three-generations poor”.
She is helping her father pay off debt and plans to tell her son not to marry.
“If all the money is in one person’s pocket, it won’t circulate,” she gripes.
Some are more equal than others
Widening inequality worries China’s leaders.
“Realising common prosperity is more than an economic goal.
It is a major political issue that bears on our party’s foundation for rule,” argued Xi Jinping, China’s paramount leader these days, in 2021.
He insisted at the time that the government was redoubling efforts to curb inequality.
“We cannot let an unbridgeable gulf appear between the rich and the poor.”
An oft-quoted Confucian saying runs: “Fear not scarcity, but inequality.”
Mr Xi set goals of achieving “common prosperity” by 2050 and of making substantial progress to that end by 2035.
But the Communist Party has also emphasised that common prosperity is about “first making the cake bigger, then dividing it fairly”, not “robbing the rich to help the poor”.
It says it wants an “olive-shaped” distribution of wealth: a robust middle class with few poor or rich people.
It talks of a three-pronged approach to reducing inequality, through higher wages for the poor, state assistance and philanthropy.
The party also bashes the rich on occasion.
As part of a “common prosperity” drive, some state-owned financial institutions capped bankers’ salaries at $400,000 a year and made some who earned more than that return the difference or bonuses.
It periodically enjoins private companies to donate more to charity.
Its anti-corruption campaigns often claim the scalps of business leaders or officials.
Indeed, the rich are supremely conscious that, however upright their conduct, the state may confiscate their wealth more or less at will.
Yet the party has dragged its feet for decades about introducing an inheritance tax.
It considered including one in its first tax system in 1950, but decided against it to help promote economic recovery after a long civil war.
In 1993 and again in 2013, it considered the idea but decided against it.
Last year lawmakers proposed an inheritance tax at the National People’s Congress (NPC), China’s rubber-stamp parliament, to promote social equity, philanthropy and consumption.
The NPC acknowledged the merits of taxing inheritance but urged further research, putting off any action until “an appropriate time”.
Some economists argued that it was a bad idea to introduce new taxes during a slowdown.
The party has described reducing taxes and fees as “a major policy choice for addressing current downward economic pressure”.
There was also fear of encouraging capital flight, which remains possible despite China’s capital controls.
There also may be a vested interest at work: many party grandees are rich.
An inheritance tax would not only dent their families’ fortunes, but also risk exposing widespread graft among senior officials.
There is no indication that resentment at inequality and official hypocrisy will lead to social unrest yet.
But it does appear to be changing the aspirations of young people.
“Love you, dear self!” urges one meme—a call, in essence, to stop striving and splurge.
“Effort doesn’t guarantee success, but not trying definitely feels good,” argues a blogpost explaining the meme.
“One generation holds power tightly in their hands, allowing only a tiny amount of resources to slip through their fingers.
By the time the younger generation arrives, there are barely a few grains of rice left.”
The fad is the latest variation on “lying flat”—a euphemism for dropping out of China’s exhausting rat race.
Ms Long in Guizhou, for one, is content just to earn enough for espresso drinks and the stylish Adidas Tang jacket around her shoulders.
“In this downturn, we must patiently wait for the wind to change,” she says.
Some young people are happy to live off their parents.
Kenlao, meaning “gnawing elders”, is a dismissive term for those who rely on parental largesse.
In recent years such deadbeats have been superseded by “full-time children”, who might do chores in exchange for room and board.
Work is for the birds
Zheng Shanghang, the son of literature professors in the eastern province of Zhejiang, studied film direction and art management.
His job at a state-owned enterprise made him miserable, so when his mother said she would be happy for him to return home, he quit.
“I don’t worry about my next meal.
My parents have covered most sources of anxiety in that regard,” he says.
He spends his time making videos about his life, not looking for other work.
“After quitting, my priority is definitely how to make myself happy every day.”
Other young people see marriage as a surer means of upward mobility than hard graft.
A whole industry has arisen to provide “socialite courses”, which teach women how to attract a rich husband.
A marriage consultancy with the same remit promotes its services on social media with a video entitled “Marriage is always more important than effort.”
The party has long worried that a nation of hard workers will slack off.
“We cannot use ‘class stratification’ as an excuse to justify our loss of fighting spirit.
Children from ordinary families should strive even harder and firmly believe that every effort brings its reward,” exhorted an editorial in the People’s Daily, a party mouthpiece, in 2017.
Yet even some of the rich appear to be losing their will to strive.
Chen Yuhui, whose parents built an electronics contract manufacturer before selling it in 2018, summarises for the seminar in Shanghai the difference between the risk-taking era of their parents’ generation and the current age.
Her parents’ generation made China the factory floor of the world.
Now her family lives off income from investments, which she manages.
“Frankly, 80% of what they achieved back then was given by the era’s dividends,” she says.
“The second generation shouldn’t take risks; we should protect our wealth.”
Wang Weiyang is the CEO of Tucson, a firm that builds custom furnishings for celebrities, tech titans and financiers.
He started his first business at the height of the reform era.
“After opening to the outside world, you could sell everything,” he recalls.
“Our generation was full of dynamism.”
These days, the affable boss reflects, both the domestic economy and export markets are harder to navigate.
“There are fewer opportunities than before.
Why?
Everything’s established,” he says.
In his chunky Valentino boots and flared Levis, Mr Wang, a youthful 59, does not look on the verge of decrepitude.
He displays medals from the 20 marathons he has run on his office wall.
What is more, his daughter-in-law, Ke Xi, does not seem short of drive.
The 26-year-old grew up in an ordinary family and always knew she wanted to “move up” in life.
She married Mr Wang’s son but does not yet feel she can relax.
She is in charge of marketing and digital initiatives at Tucson and, along with her husband, Wang Mo, who returned to develop Tucson’s export business after studying at Le Cordon Bleu in Australia, has big plans to modernise the firm.
They intend one day to list the firm, and thus hope to bankroll an elite upbringing for their future children, including educations at top universities in America.
Ms Ke can “lie flat”, she says, only once their net worth ends in eight or nine zeros.
But as industrious and ambitious as all this sounds, Ms Ke does not see boundless opportunity.
She describes herself as the epitome of “involution”, a term that is widely used to describe competition so intense it is counterproductive.
“It’s not that young people today aren’t willing to grind,” she insists.
“It’s just that even if they did, they know it wouldn’t be meaningful.
It might mean going from 1 to 1.2, whereas before it might have meant 1 to 50 or 100.
They seemed to have no ceiling, but now our ceiling has been completely pushed down by class.”
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